According to Debajit Saha, Senior Analyst - Precious Metals
Demand, GFMS Thomson Reuters, said, “We estimate Silver bullion imports into India have increased quite sharply this year by 35.2 per cent to around 6942 tonnes, compared to 5133 tonnes in 2017”. A leading importer, however, estimated import growth around 20 per cent.
Debajit said that in Q4 Indian consumers bought both silver jewellery and investment grade bars and coins. Traders bought more silver this year than last year as a ‘tactical’ purchase which eventually has increased the imports volume. Excessively high price of gold, due to huge depreciation of rupee, has also diverted precious metal buyers towards silver. Silver jewellery demand has increased in the Q4 by 20 per cent.”
There was arbitrage demand for silver import due to higher price difference between futures prices of silver on major exchange MCX and spot market price. Traders are buying at spot market and selling future contracts whenever the difference between two markets
is going markedly higher than normal.
Viraj Didwania, director, Foresight Bullion, one of the large silver importer in India, said, “We have seen higher consumer demand in 2018 and mostly from rural consumers”.
Silver follows gold in terms of price. Silver also has huge industrial use. Globally over half silver is used for industrial purpose. In India silver buyers are also price sensitive. Chirag Thakkar, director, Ahmedabad headquartered, Amrapali Group, and a big silver importer, said, “There was huge buying by silver stockists who buy at lower price apart from silver demand for industrial use.”