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MUMBAI (Commodity Online): India, the largest consumers of gold and silver in the world, is setting new records in the import of silver this year. Spurred by huge industrial and investment demand, silver import by India is likely to hit a record high this year.
According to the year-end estimates by the Bombay Bullion Association, the apex traders body in gold and silver, imports of silver by India will rise by nearly 25% in 2010 to hit more than 1200 tonnes.
Prithviraj Kothari, president of the Bombay Bullion Association, said that festive season sales and strong industrial demand has pushed up the consumption of the yellow metal in India in 2010.
“Despite the high prices of silver, the consumption of the metal has been rising in India. Silver sales have picked up in India during festivals. Silver imports by India will hit 1,200 tonnes in 2010," Kothari said.
In 2009, India’s import of silver was around 1,000 tonnes.
Kothari said that the increase in silver imports by India is supporting global prices, which have rallied to 30-year highs in December.
India's silver demand averages 2,500 tonnes per year and the country, which produces around 7.3 million ounces a year (206.95 tonnes).
Indian appetite for silver is coming partly from rural buyers as a normal monsoon in 2010 has boosted crop production with a consequent benefit to incomes, after last year's severe drought shriveled spending by farmers.
Around 50 percent of imports come from China while recycling makes up some of the supply of the metal.
Silver prices globally and domestically are currently running near record highs -- partly hauled up by gains in gold, but the poorer cousin is performing more brilliantly.
Domestic silver prices on India's Multi Commodity Exchange are currently close to records at 43,899 rupees per ounce and the metal is offering better returns than gold.
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