Silver imports may fall as investors book profit

India’s silver imports are likely to fall by more than 40% from a year ago to the lowest level in eight years, with investors booking profit by selling stocks after local prices rallied to a record high this month, leading importers said.

Lower imports by the world’s biggest silver consumer could weigh on global prices that have risen more than 50% so far in 2020. “Investors who bought silver at higher levels got an opportunity to exit after a long time. For some, even after a decade,” said Chirag Thakkar, CEO of Amrapali Group Gujarat, a leading silver importer.

Their selling will reduce import requirement for 2020 to 3,000 tonnes, the lowest since 2012, he said.

India imported 5,598 tonnes of silver in 2019, according to data compiled by Refinitiv GFMS. The country fulfils most of its silver requirement through imports.

Investors are sceptical whether silver will hold recent gains, said Prithviraj Kothari, MD of RiddiSiddhi Bullions. “There is rush from sellers but very few buyers are there. Sellers are forced to accept hefty discount,” he said. Demand from jewellery and industry is negligible as millions of people have lost jobs or have to accept a pay cut, said a Mumbai- based dealer, adding: “Sentiments are very weak in retail market.”