India’s silver imports are likely to fall by more than 40 per cent from a year ago to the lowest level in eight years, with investors booking profit by selling stocks after local prices rallied to a record high this month, leading importers said.
Lower imports by the world’s biggest silver consumer could weigh on global prices that have risen more than 50% so far in 2020.
“Investors, who bought silver at higher levels, got an opportunity to exit after a long time. For some, even after a decade,” said Chirag Thakkar, CEO of Amrapali Group Gujarat, a leading silver importer.
Their selling will reduce import requirement for 2020 to 3,000 tonnes, the lowest since 2012, he said.
India imported 5,598 tonnes of silver in 2019, according to data compiled by Refinitiv GFMS. The country fulfills most of its silver requirement through imports.
Investors are sceptical whether silver will hold recent gains, said Prithviraj Kothari, managing director of RiddiSiddhi Bullions.
“There is rush from sellers but very few buyers are there. Sellers are forced to accept hefty discount,” he said.
Local silver futures were trading around Rs66,800 per kg on Thursday after hitting a record high of Rs77,949 earlier this month. But in the spot market silver was offered at discount of more than 5,000 rupees per kg due to weak demand, Thakkar said.
India’s silver imports in the first seven months of the year nearly halved from a year ago to 1,900 tonnes and it is unlikely to rise again unless prices correct sharply, said a Mumbai based dealer with a bullion importing bank.
Demand from jewellery and industry is negligible as millions of people have lost or have to accept a pay cut, said the dealer, adding: “Sentiments are very weak in retail market.”
Meanwhile, jewellers in the traditionally lucrative Indian gold market are struggling – even while the metal’s value skyrockets – as coronavirus fears keep sales down, craftsmen at home and shops shuttered.
Months after India lifted its strict lockdown, the country’s biggest gold market Zaveri Bazaar remains desolate, with most stores closed and no customers in sight.