With the fall in gold
prices internationally, jewellers and traders imported 100 tons gold
in August to augment their inventories before falling rupee
takes away the lower price advantage. However, the sudden jump in import has again raised current account deficit worries.
According to GFMS Thomson Reuters estimate, import of gold
in India was 100 tons as compared to 46.2 tons in August last year, resulting in doubling of import bill for gold
in August. Gold
import bill for August 2017 was $1.89 billion. Import growth in tons is 116.5 but the average gold
price in the international market in August was down 6.5 per cent compared to previous August.
Sudheesh Nambiath, head, India Gold
Policy Centre said, "Jewellery show held last month has shown good turnout and jewellers were low on inventories. This has resulted in a sharp jump in gold
import in August as prices were also low and jewellers considered it the right time and price to add inventories."
Interestingly, some exporters are also importing gold
and re-exporting those with marginal value addition to pocket arbitrage benefits. This is also known as round tripping. GFMS estimates that round tripping-related monthly gold
import was averaging 12 tons earlier which has increased to 20 tons of late and hence net gold
import for the domestic market is not that high.
Nambiath said the Kerala floods will also impact gold
demand as the southern state has some 15 per cent share in domestic demand. Considering all these factors, jump in gold
import in August is not a worry.
A leading gold
refiner stated that there has been a spurt in dore or unrefined gold
which is helping value addition to be made in India in terms of refining. In April-July 2017, 87 tons dore (in terms of refined gold
from that) was imported against total import of 323 tons while this year during the same period 82 tons dore imported against four month total import of 267.7 tons making imports of dore as a per cent of total import much higher, said GFMS estimates.