India’s silver imports are expected to regain from the first half stagnation, as regular monsoon rains will boost rural incomes and therefore, demand for silver jewelry, industry officials predict.
More than 60% of India’s silver demand comes from farmers, who keep their savings in silver bangles and other jewelry. Good monsoon rains push farm output, improving the spending power of the millions of people occupied in agriculture.
India’s weather department has forecasted that June-September monsoon rains will be normal, providing relief after the country last year experienced one of its worst-ever droughts, which hurt farm output and left little scope for rural spending.
Silver demand has in due course been muted this year. Elevated prices have also dented purchases, and imports of the metal are estimated to have fallen to 300-500 tons in the January-June period from 600 tons a year earlier, industry officials said.
Daily sales are currently around 2.5 tons, despite jewelers offering price discounts of 10%-15%. However, silver scrap sales have jumped to 500 kg to a ton from close to nothing a few months ago.
In Mumbai, the country’s main bullion market, silver prices were US $669.0573 a kilogram last Wednesday, very close to the all-time high of US $675.8379.
