New Delhi: This Diwali, thanks to globalization, Indians will be able to drink more of better whisky, and crack open more pistachios or munch more almonds as they do that.
And those into buying gold and silver at a time when it is considered auspicious to buy these metals will find that they can still buy the shiny stuff at prices lower than they may otherwise had to pay.
Diwali is in most parts of the country about giving (and receiving) gifts. The most popular gifts are dry fruits, liquor— especially whisky—and gold and silver.
Dry fruits are cheaper this year because of the rupee’s rise against the dollar. Almost all the nuts (and dry fruits such as raisins and apricots) sold in India are imported, and the 12.5% the rupee has appreciated against the greenback means that customers now get more crunch for the rupee than they would have otherwise.
This year, the wholesale price of almond (badaam, a popular nut from the gifting point of view) has fallen to Rs285 a kg from Rs400 last year. According to almond sellers, apart from the rising rupee, a bumper crop of almonds this year in the US has helped. Traders in dry fruits say they usually sell around Rs100 crore worth in a single month during Diwali. “We expect to do much better business this year on account of the reduced prices,” says Shyam S. Bansal, general secretary of the Federation of Dry Fruits and Spices Traders Association of India. Higher volumes are expected to make up for lower prices.
Then there is liquor. Imported liquor, which sees the most sales during this season, has become less expensive. Not because of the rupee’s appreciation—a significant portion of liquor imports to India is from Europe, and the rupee hasn’t really appreciated anywhere as much to the euro as it has to the dollar—but because a recent reduction in additional customs duty has enabled companies to cut prices by as much as 30% in some cases. Some of these companies are also trying to grow their presence in India because a rapidly expanding economy could just mean a growing market for premium liquor.
In the run-up to the season, Diageo India, the Indian affiliate of the world’s largest liquor company Diageo Plc. launched its popular rum Captain Morgan, a variant of its vodka brand, Smirnoff Black, beer brands Guinness and Kilkenny, three international wine brands Blossom Hill, Barton & Guestier and Piat d’Or, and four variants of its new domestic wine brand Nilaya. Beam Global Spirits & Wine Inc. recently launched its popular bourbon brand, Maker’s Mark, here. And Moet Hennessy India Pvt. Ltd launched three variants of premium single-malt whisky brand Glenmorangie.
Indians don’t have much to cheer about when it comes to the third category of products traditionally in demand during Diwali—precious metals.
That’s because, globally, gold and silver prices are at record levels, with the yellow metal trading at a 27-year high. The appreciating rupee has made both metals a little less expensive than they would have been otherwise. Still, India imported much less of both metals this year. Last year, 64 tonnes of gold was imported into the country in October, in time for Diwali. This year, only 14 tonnes has been imported so far. Similarly, 473 tonnes of silver was imported last year while only 78 tonnes has been brought in this year.
Bombay Bullion Exchange president Suresh Hundia says while imports have fallen, the stronger local currency has limited the rise in gold prices. “The strong rupee has made it possible for gold prices to remain at around Rs10 lakh per kilo otherwise it should have crossed Rs11 lakh by now,” he says.