MUMBAI: India, the world's No. 1 silver buyer, is on track to show sharply higher imports this year of the metal near 30-year peaks, as consumers normally fond of more expensive gold seek to lower cash outlays.
"Certainly there has been an increased interest in silver, and it's drawing interest from people who cannot afford gold, even return-wise the metal has done well," said Haresh Acharya, head of the bullion desk at Ahmedabad-based gold wholesaler Parker Agrochem .
India's silver demand averages 2,500 tonnes per year and the country, which produces around 7.3 million ounces a year (206.95 tonnes) according to the Silver Institute, could import 20 percent more this year or 1,200 tonnes, the Bombay Bullion Association (BBA) says.
Around 50 percent of imports come from China while recycling makes up some of the supply of the metal. Silver is used in jewellery, coins and bars for investors, while industry uses the metal for products from light switches to cars.
Silver prices globally and domestically are currently running near record highs -- partly hauled up by gains in gold, but the poorer cousin is performing more brilliantly.
"Compared with gold, the price of silver still has a long way to go," said Ronald Leung, director of Lee Cheong Gold Dealers in Hong Kong.
Spot silver traded just under $29 an ounce on Friday, just off 30-year highs above $30, while gold was at $1,391 per ounce, off a record high above $1,430 hit this month.
Domestic silver prices on India's Multi Commodity Exchange are currently close to records at 43,899 rupees per ounce and the metal is offering better returns than gold.
"There is demand for silver as the sentiment in the market is that prices may go to 50,000 rupees or 60,000 rupees now," said Shekar Jog, partner at Sangli-based V.S. Bullion.
The BBA's president, Prithviraj Kothari, also thinks silver on the domestic market could hit the 50,000 rupees mark by the end of this year and industry players say it can still outpace gold.
Indian appetite for silver is coming partly from rural buyers as a normal monsoon in 2010 has boosted crop production with a consequent benefit to incomes, after last year's severe drought shrivelled spending by farmers.
Indians traditionally invest in gold and silver jewellery, especially during the busy festival season towards the end of the calendar year, and for weddings.
Jewellers and wholesalers said interest for silver was on the increase, especially given its returns and cheaper initial cost.
"The most important benefit for consumers is it's much more affordable than gold," said Babu Alapatt, managing director at retailer, Alapatt Gold Pvt Ltd , which also sells silver.
Some retailers are seeing more interest from buyers in silver bars or coins than jewellery, however.
"They prefer buying coins and bars than buying silver jewellery," said Shekar Jog, partner at Sangli-based V.S. Bullion.
HDFC Bank, which introduced silver coins for sale earlier this year, said interest had risen.
"In May this year when we started selling silver coins for the first time, we became the first bank in India to do so. We are extremely pleased with the progress so far. Today, we are selling silver coins through almost five times the number of branches than when we started," an HDFC Bank spokesperson said.
Sunday, December 12, 2010
China vows to quell inflation and stabilize growth
BEIJING: China will ratchet up efforts to quell inflation in 2011 while maintaining robust economic growth, state media reported on Sunday, citing a statement from an annual top-level economic conference.
"The priority is to actively and properly handle the relations between maintaining steady and relatively fast economic growth, economic restructuring and managing inflation expectations," state radio reported.
"Strategic economic restructuring will be accelerated and stabilising price levels will be given a more prominent position."
China's inflation soared past forecasts to a 28-month high in November and showed signs of spreading beyond food prices, putting pressure on the government to tighten policy.
On Friday, the day before the inflation data was released, the central bank raised banks' reserve requirements for the third time in a month to mop up excess cash in the economy. The jump in inflation suggested that more resolute action was needed.
The annual meeting, chaired by President Hu Jintao and attended by top officials from central and provincial governments, reaffirmed a shift to a "prudent" monetary policy from the previous "appropriately loose" stance. The shift was announced by the Communist Party's ruling body last week.
The change in wording was seen as a clear shift in the balance of policy-setting towards curbing inflation, paving the way for a more aggressive course of interest rate increases and lending restrictions.
"The priority is to actively and properly handle the relations between maintaining steady and relatively fast economic growth, economic restructuring and managing inflation expectations," state radio reported.
"Strategic economic restructuring will be accelerated and stabilising price levels will be given a more prominent position."
China's inflation soared past forecasts to a 28-month high in November and showed signs of spreading beyond food prices, putting pressure on the government to tighten policy.
On Friday, the day before the inflation data was released, the central bank raised banks' reserve requirements for the third time in a month to mop up excess cash in the economy. The jump in inflation suggested that more resolute action was needed.
The annual meeting, chaired by President Hu Jintao and attended by top officials from central and provincial governments, reaffirmed a shift to a "prudent" monetary policy from the previous "appropriately loose" stance. The shift was announced by the Communist Party's ruling body last week.
The change in wording was seen as a clear shift in the balance of policy-setting towards curbing inflation, paving the way for a more aggressive course of interest rate increases and lending restrictions.
Subscribe to:
Posts (Atom)