Monday, September 15, 2008

India's silver imports seen surging on lower prices

Mon Sep 15, 2008 12:53pm IST

NEW DELHI (Reuters) - India will import around 300 tonnes of silver in September to meet heavy demand triggered by falling prices, after buying just 56 tonnes in the seven months to July-end, a trade body said on Monday.

"By the month-end we are getting some 15 containers of silver, which is equal to 300 tonnes. After that, demand will probably slow down a bit," Suresh Hundia, president of the Bombay Bullion Association, told Reuters.

Silver demand has surged on lower prices and as Indians prepare to mark a series of religious festivals.

International silver prices were at $10.93 an ounce on Monday, down from about $19.45 on July 13, due to a fall in crude prices and dollar volatility.

India's annual silver imports are estimated at more than 3,000 tonnes.

Dealers said local demand for silver was so high ahead of Diwali, the Hindu festival of lights next month, they were only able to meet a fraction of it.

It is considered auspicious to buy or gift silver coins and utensils ahead of the festival.

"I am able to sell only about 500 kg of silver daily, though the demand is for about five tonnes daily. The supply of metal is extremely thin," said Rajesh Jalan, a Kolkata-based bullion dealer.

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