Gold imports by India jump as jewellers buy despite high prices1 min read . Updated: 12 Feb 2019, 09:03 AM IST
- Jewellers start to restock for the wedding season
- Inbound shipments grew 64 percent to 46 tons in January
Inbound shipments grew 64 percent to 46 tons in January from a year earlier, according to a person familiar with the data, who asked not to be identified as the figures aren’t public. However, higher prices kept a lid on supplies, which were lower than the 60 tons shipped in December. Finance Ministry spokesman D.S. Malik wasn’t immediately available for comment.
Indians consider buying gold auspicious for marriages as part of the bridal trousseau or to be given as a gift in the form of jewelry. The wedding season starts this month and purchases will jump during the second-biggest gold-buying day of Akshaya Tritiya in early May.
The World Gold Council, a London-based promotion body, expects a recovery in demand in India this year on increased spending with elections due by May. “Elections mean expenditure, which means redistribution of income," Managing Director for India P.R. Somasundaram said last month.
Steps in this direction have already been seen by the Indian Prime Minister Narendra Modi’s populist push in his final budget on Feb. 1 before the elections. The government will allocate 750 billion-rupee ($10.6 billion) a year in a cash handout plan for about 120 million farmers and give taxpayers 185 billion rupees of tax relief in the year to March 2020.
Last year “wasn’t great as far as Indian imports were concerned, largely because of depleting rural income and higher prices due to weaker rupee," said Harish Galipelli, head of commodity and currencies at Inditrade Derivatives & Commodities Ltd. “But, given the direct cash benefits to farmers and elections round the corner, there could be increased liquidity among the rural population and that may drive demand this year."
However, a key risk to demand growth prospects remain the higher domestic prices as Indians are highly price sensitive, he said. Benchmark gold futures in Mumbai rose to 33,646 rupees ($472) per 10 grams on Feb. 4, the highest since September 2013 and just below a record of 35,074 rupees touched the same year.
Shares of India’s biggest branded jeweler by value, Titan Co., erased losses and were trading at 1,053 rupees Monday in Mumbai, after dropping as much as 0.8 percent to 1,045 rupees earlier.
This story has been published from a wire agency feed without modifications to the text. Only the headline has been changed.