Gold imports rise 8.5% to 849 tonne in 2014
Mumbai-India (Jan 5) Despite stringent controls like the 80:20 scheme on gold imports for most parts of 2014, imports of the precious metal are projected to have increased 8.5% to 849 tonne in the year compared to 2013.
From June onwards, the average monthly imports stood at 90 tonne while in November, when the curbs were relaxed, imports stood at 151 tonne or $5.6 billion.
The 80:20 scheme was introduced in second half of 2013 to control gold imports and it succeeded to an extent. However, in the second half of 2014 imports rose due to demand for the precious metal. “Imports rose due to demand of consumers, which was suppressed for several months,” said an industry observer, who also tracks imports.
The last quarter of 2014 saw a spike in imports at 296 tonne, the highest after the quarter ended June 2013.
While the import bill for 2014 at $30.8 billion is less than $39 billion in 2013, the spike in the import bill is visible if one compares the data on a financial year basis. During April-December 2013-14, the bill was $23.36 billion, which has increased to $25.45 billion in three quarters of 2014-15.
Overall imports remained high despite the sharp fall in December imports, which is pegged at less than 30 tonne or around $1 billion, a fall of almots 80% compared to the previous month. The data will also be the lowest in the last 15 months and lower than December 2013 too (37 tonne). Traders say there was virtually no demand in December and the high inventories due to previous imports were still in the market.
Going forward too, the import scene may not see a big improvement. “Demand is quite dull and we don’t see any significant improvement in demand for a couple of months as now expectation is that in the budget, government may cut import duty on gold, which will bring down gold price in India to the extent of duty,” said Prithviraj Kothari of Riddhi Siddhi bullion.
Interestingly, gold was trading at a discount in December at a marginal $1-2 premium per ounce to its cost of import in the Mumbai market.
In Mumbai’s Zaveri Bazar, standard gold is trading at Rs 26,900 per 10 gram while silver at Rs 36,300 per kg.