At a time when gold imports are falling drastically, silver imports have reached a record high in 2013. Industry estimates suggest in 2013 India imported around 5,500 tons of silver which is 180% higher than previous year. So far only once India imported silver more than 5,000 tonnes and that was in 2008.
Traders have been importing silver as there was hardly any stock left pressing need for restocking silver at lower prices. As gold was getting costlier, there was sudden rise in demand for silver jewellery in India as well as in export market.
Monal Thakkar, Director, Gujarat headquartered Amrapali group feels that the growth in silver import may slow in 2014. Even prices are expected to be in the range of Rs.43,000-49,000 per kg for silver and Rs.28500-Rs.32,000 per 10 gram for gold subject to rupee volatility.
Investors in silver are also now turning traders as returns are lower compared to past. Outlook for silver price is also not as bright as its industrial demand is lagging behind following overall slow industrial activities.
Silver jewellery however is still in demand. According to survey carried out by the Washington based the Silver Institute with National Jeweler, among all jewellery including gold and diamond, 36% respondent said silver jewellery gave highest and consistent margins. Last in the list are gold and platinum.
"Silver jewellery has a better resale value and making charges are much lower," said Monal Thakkar. Average making charges for silver jewellery is one third or even fourth that of charges for gold jewellery.
Survey results show, "73% of the jewelry retailers said their silver jewelry sales increased in 2013. 15% said their silver jewelry sales remained the same and 12% saw a decrease in sales." 2700 large jewelers had participated in the survey.
Price sensitive investors have been moving to silver jewellery off late and even the survey has shown that 50% sale is of jewellery costing up to $100 and 42% sale in $100-$500 price range and 50% buyers have been found in the age group of 20-40. Interestingly 92% participants were optimist or bullish for silver saying that will remain so for several more years.
