Silver price hikes cause imports into Gujarat to drop drastically

By

Isabelle Crossley

Published
Jun 7, 2023

Silver imports to Gujarat have seen a significant decline of 98% in April and May this year. While prises have continued to rise, demand has decreased in terms of both retail and investment. 

“Silver price stayed above the Rs 70,000 mark for a month,” said GIFT City’s precious metals advisory committee’s advisor Haresh Acharya, TNN reported. “The prolonged high prices of silver have become a major deterrent for its demand. Industrial procurements, which account for nearly 50% of the silver consumption, have dramatically gone down, the demand on retail and investment fronts is also low.”
 
Demand for silver jewellery and artefacts had remained high for numerous months, reaching record levels in the 2023 financial year. However, demand is beginning to wane in jewellery stores across the area. Silver imports dropped from 97.6 metric tonnes in April to May last year to 1.61 metric tonnes this year, according to the Ahmedabad Air Cargo Complex, ET Bureau reported. 

“Unseasonal rainfall has adversely affected crop yields in Gujarat, leading to weak demand in rural areas,” said Acharya. “Additionally, the delayed monsoon has further dampened the demand for silver. Investors are adopting a cautious approach and waiting for prices to stabilise before making new investments.” 
 
With retail demand low, jewellery businesses are hoping for prices to soften and stimulate demand for the summer festivities when many shoppers across Gujarat would purchase silver jewellery and artefacts. As silver prices reached Rs 77,000 per kilogram last month, according to the India Bullion and Jewellers’ Association, it may be a while before retail demand returns to the highs of the 2023 fiscal.