The Hindu Business Line : Silver imports to resume on price advantage

AFTER a break of about four months, silver imports into the country are slated to resume, say reliable sources in the bullion trade. This follows a small price advantage to importers as the fall in domestic prices has not been as sharp as the decline in international prices.

According to these sources, some 10 containers amounting to 200 tonnes were booked for import last week. These consignments are expected to arrive in the next 10 to 15 days at Kandla and Nhava Sheva (Mumbai) ports. Majority of the importers are banks, the sources added.

"Imports have resumed due to price advantage. Imports are cheaper by about Rs 200 a kg over local prices," Mr. Dinesh Parekh, former director of the Bombay Bullion Association (BBA), said.

Imports in small lots have already begun this week via air route through major banks and importing agencies. During the last 3-4 days, the daily arrivals in Mumbai are reported to be around 600 to 650 kg. Besides, silver scrap inflows in to Mumbai market have declined to just 150 kg from the record level of 750 kg last week.

However, Mr. Suresh Hundia, President of the Bombay Bullion Association feels otherwise. "There are no reports of fresh deals for imports. A few stockists and banks have some stocks-on-hand that is enough to cater local demand," he told Business Line.

Silver prices in Mumbai have fallen by Rs 2,380 or 20 per cent to Rs 9,820 per kg in just 23 days from an all-time high of Rs 12,270 per kg quoted on April 2. In the New York market, silver dropped by $2.40 to $6.03 an ounce on Thursday from the recent new high of $8.45 an ounce on April 2, in intra-trade, a fall of nearly 30 per cent. The surging of dollar value against euros is another reason for this trend.

The fall in the domestic market recent times has been more pronounced with silver losing as much as Rs 1,295 in three days as the global markets continued to melt down on hectic selling. On April 14, the white metal recorded its first biggest fall of around Rs 1,300 per kg on a single day. But despite the heavy fall, there still exists a gap between domestic and overseas prices creating a profit opportunity for importers.

"Following sharp fall in local prices, demand will increase. Local off-take of silver has picked up this week," Mr Bhargav Vaidya, a bullion analyst and director of BBA said.

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