Gold imports jump about 5-times in Sep on global price slide

Gold imports jump about 5-times in Sep on global price slide

Gold imports jump about 5-times in Sep on global price slide

Gold imports are estimated to have jumped about five-times to around 95 tonnes in September, helped by spurt in demand in festival season and falling global prices, an industry expert said today.

"The import of the yellow metal is estimated to be around 95 tonnes during this September," All India Gems and Jewellery Trade Federation Director Bachhraj Bamalwa told PTI.

Gold imports were at around 15-20 tonnes in September 2013, he said.
"The imports rose mainly due to decline in price in global markets, which reduced year-on-year by nearly 10-15 per cent. The September imports is a very normal phenomenon as jewellers require stocks to manufacture for the festive season," he added.

There were hardly any imports during September last year due to several restrictions by the government in order to control Current Account Deficit (CAD), he said, adding "that caused a severe stock crunch for the festivals last year."

According to government data, gold imports were at USD 3.75 billion in September this year compared to USD 682.5 million in the same month last year.

Bamalwa said the September imports have increased the availability of stocks in the market and this has helped in reducing smuggling.

"The smuggling has gone down to a great extent due to the availability of gold," he said.
Going forward, he said, the last quarter is the most important period for gold imports.

"The jewellers have already manufactured jewelleries of the gold imported during September for the festivals. The money from the sales of these jewelleries will make them buy more gold. So most of the purchase will take place in October and November, which will decline in December. So together in October and November we are expecting gold import of around 150 tonne," he explained.

However, collectively in the last quarter imports are expected to be 170-200 tonne, Bamalwa said.

In the October-December period imports stood at only 50-60 tonne, he said.
The government increased import duty to 10 per cent from 2 per cent to curb gold imports last year to control the widening CAD, which also contributed towards depreciation of rupee.

The Reserve Bank also introduced 80:20 rule that allowed nominated agencies to import gold on the condition that 20 per cent of the inward shipment will be exported. The permission to import the next lot was given on fulfilment of export obligation.

However, in March this year the RBI allowed more banks, including Axis Bank and Kotak Mahindra Bank, to import gold under the 80:20 scheme, easing restrictions on imports.