MUMBAI (Scrap Monster): According to the Paris-based Banker, Societe Generale, last year’s execution of stringent gold import regulations in India had benefited in the rise of silver demand in the country, which is likely to fall this year. Commenting on the research report, the Bank says that though silver demand saw huge growth in 2013 with the gold curbs diverting some traditional gold investors towards silver, 2014 will see a reduction of silver demand as the government is looking forward for some gold curb easing.
India claims to be the largest consumer of silver in the world and the jewelry industry of the country reaching at over $ 40 billion last year; 2013 saw the best season for Indian weddings as well which fueled the strong demand for the white metal better than gold. Report released by the Societe Generale informs that silver demand in 2013 rose one and a half times more as compared to 2012. The silver import data of India reports 4,800 tons of silver imported in 2013. Thus, according to analysts, India claims to be contributing 12 % to 15 % of the total silver demand of the world in the near years.
Hit by increased gold import duty and premium in 2013, Indian consumers were seen to revert to white metal last year. Estimates show that the total silver import in India at the first quarter of the fiscal in 2013 was reported to be at $ 1.78 billion which was seen to be 311 % higher than its import in the corresponding period in 2012. The highest record of silver import in India was reported in 2008 which stood at 5,048 tones.
Silver bullion traders reported silver to zoom high at $ 32 in Feb. 2013 before dropping down by 40% to $ 19.40 on the Comex Index. And when gold price suffered a fall of 3% in 2013, Silver was found to drop by 40%. This attracted new investors towards silver than to gold.
According to Societe Generale, Silver import in India during April to August 2013 was seen to accelerate due to the drastic price falls. Silver import from Jan. to Aug. 2013 was found to double as compared to 2012 import to reach 4,073 tones.
However, in 2014 Feb., the signs of recovery of silver price along with the news of easing gold curbs may impact the demand for silver among Indians. If the gold import structure changes, then investors would revert to gold, lowering the demand of silver.