Ahmedabad: Agriculture and rural distress has hit demand for silver to a great extent in 2019. The import of silver declined by 40% year-on-year in 2019. The precious metal’s imports fell from 150.7 metric tonne (MT) in 2018 to 89.9MT in 2019, according to data by Ahmedabad Air Cargo Complex.
Silver price stood at Rs 49,600 per kg in the Ahmedabad market on Saturday. Analysts said that demand for both silver in terms of bullion as well as jewellery has declined. “With an acute water scarcity situation in the initial part of the year, and excess rainfall in the later half, rural incomes were affected to a great extent. This is clearly visible in the mounting burden of bad loans in the agriculture sector. Silver demand across the country is largely driven by people in the rural areas. With majority of rural population reeling under stress due to such an agrarian crisis, silver imports have declined,” said Haresh Acharya, director, India Bullion and Jewellers’ Association (IBJA).
Analysts also blame it on the prices of silver which remained significantly high throughout the year. “Due to slowing economic scenario, the cashflow situation is a major concern with several businesses and industrial sectors reeling under liquidity crisis amid stretched payment cycles. Moreover, price of silver also remained fairly high throughout the year, which deterred investments,” Acharya added.
Jewellers said that the amount of silver recycled is also very high. “Just like gold, silver purchases have also remained muted due to high prices and cashflow crisis. Moreover, there is a high degree of recycling in silver purchases as well. People come with previously purchased silver to buy new jewellery and thus, overall imports got affected,” said Ashish Zaveri, media convener, Jewellers’ Association of Ahmedabad (JAA).
Source: timesofindia.indiatimes.com