Q3 gold imports seen falling by a third: Reuters Poll

INDIA-GOLD-POLL:Q3 gold imports seen falling by a third: Reuters Poll

mumbai  July 18, 2012, 18:58 IST

mumbai  07 18, 2012, 19:00 IST

 

India's imports fell by more than a half in the June quarter and could slide by a third in the next three months as prices inflated by a weak rupee and a 4 percent import duty encourage traders to use scrap, a Reuters showed.

was the world's biggest buyer last year but imports have weakened in 2012, in line with government expectations, after import duties were hiked in March. Stronger global prices, and a weaker rupee compared to the U.S. dollar, have also increased buyers' costs.

Shipments also slowed after economic growth weakened by nearly half year-on-year to 5.3 percent in the first quarter, its lowest level in nine years. Inflation of around 10 percent also ate into Indians' disposable income, reducing their appetite for gold.

imports could fall 34 percent in the third quarter of calendar 2012 to 135 tonnes, a Reuters of 10 market participants showed.

"People in now want steady rates, they are fed up with the fluctuation in prices," said Kumar Jain, vice-president of Mumbai Jewellers Association, which groups 10,000 members.

Imports in the second quarter to June are estimated to have fallen by 55 percent to 135 tonnes, the showed. In the first three quarters, is estimated to have imported $27 billion of gold, broadly in line with the government's target.

The government wants to cut imports to $38 billion in the fiscal year to March 2013, down 38 percent on the year, to help rein in a bulging current account deficit. Imports during April and May were down $6.2 billion.

Weak monsoon rains so far this season could also dent demand from rural areas, which make up about 60 percent of the country's demand.

"Rural jewellery purchases in are expected to suffer as reduced harvests negatively impact disposable incomes," said Citi Group in a research note on July 16.

China could trounce as the world's biggest consumer in 2012 on persistent weakness in imports at home.

Since the start of the year, has moved in a wide range of 27,814-30,428 rupees per 10 grams. On Wednesday, was trading at 29,235 rupees, after hitting a peak of 30,428 rupees on June 19.

Prices are expected to remain steady at 29,750 rupees per 10 grams in the third quarter on expectations the rupee will remain steady against the U.S. dollar or even reverse from its record low struck in mid-June.

"Some appreciation could be seen in rupee in the coming quarter," said Pranav Mer, senior analyst with Mangal Keshav Commodities.

The rupee could firm due on expectations of bigger dollar inflows into the stock market, Mer said. The rupee plays an important role in determining the landed cost of gold, which are quoted in dollars.

For prices in different currencies, click http://link.reuters.com/cyv95s

For graphic of India, China demand, click http://r.reuters.com/xem66s

JEWELLERY KINGS

Analysts expect the amount of recycled scrap to jump 66.7 percent to 25 tonnes in the third quarter as higher prices entice traders to melt their old into newer designs.

"People have already liquidated scrap in the second quarter. They will wait to sell more scrap for the higher prices of 31,000-32,000 rupees," said Mayank Khemka, managing director with Khemka Group, a wholesaler in New Delhi.

Indians are estimated to own about 20,000 tonnes of gold, about three times higher than the holdings with the U.S. Federal Reserve, in the form of jewellery, coins and bars, which consumers melt down to take advantage of any spurt in prices.

China's old scrap supply stood at 124.7 tonnes, the second biggest after the United States, while India's recycled supply stood at 57 tonnes, nearly half of China's.

"At a time imports are getting restricted, people with jewellery are the kings," said an official from bullion importing in Mumbai.

(Editing by Miral Fahmy)

image
Business Standard
177 22
Business Standard

Q3 gold imports seen falling by a third: Reuters Poll

INDIA-GOLD-POLL:Q3 gold imports seen falling by a third: Reuters Poll

Reuters  |  By Siddesh Mayenkar</p>MUMBAI  



mumbai  July 18, 2012, 18:58 IST

mumbai  07 18, 2012, 19:00 IST

 

India's imports fell by more than a half in the June quarter and could slide by a third in the next three months as prices inflated by a weak rupee and a 4 percent import duty encourage traders to use scrap, a Reuters showed.

was the world's biggest buyer last year but imports have weakened in 2012, in line with government expectations, after import duties were hiked in March. Stronger global prices, and a weaker rupee compared to the U.S. dollar, have also increased buyers' costs.

Shipments also slowed after economic growth weakened by nearly half year-on-year to 5.3 percent in the first quarter, its lowest level in nine years. Inflation of around 10 percent also ate into Indians' disposable income, reducing their appetite for gold.

imports could fall 34 percent in the third quarter of calendar 2012 to 135 tonnes, a Reuters of 10 market participants showed.

"People in now want steady rates, they are fed up with the fluctuation in prices," said Kumar Jain, vice-president of Mumbai Jewellers Association, which groups 10,000 members.

Imports in the second quarter to June are estimated to have fallen by 55 percent to 135 tonnes, the showed. In the first three quarters, is estimated to have imported $27 billion of gold, broadly in line with the government's target.

The government wants to cut imports to $38 billion in the fiscal year to March 2013, down 38 percent on the year, to help rein in a bulging current account deficit. Imports during April and May were down $6.2 billion.

Weak monsoon rains so far this season could also dent demand from rural areas, which make up about 60 percent of the country's demand.

"Rural jewellery purchases in are expected to suffer as reduced harvests negatively impact disposable incomes," said Citi Group in a research note on July 16.

China could trounce as the world's biggest consumer in 2012 on persistent weakness in imports at home.

Since the start of the year, has moved in a wide range of 27,814-30,428 rupees per 10 grams. On Wednesday, was trading at 29,235 rupees, after hitting a peak of 30,428 rupees on June 19.

Prices are expected to remain steady at 29,750 rupees per 10 grams in the third quarter on expectations the rupee will remain steady against the U.S. dollar or even reverse from its record low struck in mid-June.

"Some appreciation could be seen in rupee in the coming quarter," said Pranav Mer, senior analyst with Mangal Keshav Commodities.

The rupee could firm due on expectations of bigger dollar inflows into the stock market, Mer said. The rupee plays an important role in determining the landed cost of gold, which are quoted in dollars.

For prices in different currencies, click http://link.reuters.com/cyv95s

For graphic of India, China demand, click http://r.reuters.com/xem66s

JEWELLERY KINGS

Analysts expect the amount of recycled scrap to jump 66.7 percent to 25 tonnes in the third quarter as higher prices entice traders to melt their old into newer designs.

"People have already liquidated scrap in the second quarter. They will wait to sell more scrap for the higher prices of 31,000-32,000 rupees," said Mayank Khemka, managing director with Khemka Group, a wholesaler in New Delhi.

Indians are estimated to own about 20,000 tonnes of gold, about three times higher than the holdings with the U.S. Federal Reserve, in the form of jewellery, coins and bars, which consumers melt down to take advantage of any spurt in prices.

China's old scrap supply stood at 124.7 tonnes, the second biggest after the United States, while India's recycled supply stood at 57 tonnes, nearly half of China's.

"At a time imports are getting restricted, people with jewellery are the kings," said an official from bullion importing in Mumbai.

(Editing by Miral Fahmy)

RECOMMENDED FOR YOU

Q3 gold imports seen falling by a third: Reuters Poll

INDIA-GOLD-POLL:Q3 gold imports seen falling by a third: Reuters Poll

India's gold imports fell by more than a half in the June quarter and could slide by a third in the next three months as prices inflated by a weak rupee and a 4 percent import duty encourage traders to use scrap, a Reuters poll showed. mumbai  July 18, 2012, 18:58 IST

mumbai  07 18, 2012, 19:00 IST

 

India's imports fell by more than a half in the June quarter and could slide by a third in the next three months as prices inflated by a weak rupee and a 4 percent import duty encourage traders to use scrap, a Reuters showed.

was the world's biggest buyer last year but imports have weakened in 2012, in line with government expectations, after import duties were hiked in March. Stronger global prices, and a weaker rupee compared to the U.S. dollar, have also increased buyers' costs.

Shipments also slowed after economic growth weakened by nearly half year-on-year to 5.3 percent in the first quarter, its lowest level in nine years. Inflation of around 10 percent also ate into Indians' disposable income, reducing their appetite for gold.

imports could fall 34 percent in the third quarter of calendar 2012 to 135 tonnes, a Reuters of 10 market participants showed.

"People in now want steady rates, they are fed up with the fluctuation in prices," said Kumar Jain, vice-president of Mumbai Jewellers Association, which groups 10,000 members.

Imports in the second quarter to June are estimated to have fallen by 55 percent to 135 tonnes, the showed. In the first three quarters, is estimated to have imported $27 billion of gold, broadly in line with the government's target.

The government wants to cut imports to $38 billion in the fiscal year to March 2013, down 38 percent on the year, to help rein in a bulging current account deficit. Imports during April and May were down $6.2 billion.

Weak monsoon rains so far this season could also dent demand from rural areas, which make up about 60 percent of the country's demand.

"Rural jewellery purchases in are expected to suffer as reduced harvests negatively impact disposable incomes," said Citi Group in a research note on July 16.

China could trounce as the world's biggest consumer in 2012 on persistent weakness in imports at home.

Since the start of the year, has moved in a wide range of 27,814-30,428 rupees per 10 grams. On Wednesday, was trading at 29,235 rupees, after hitting a peak of 30,428 rupees on June 19.

Prices are expected to remain steady at 29,750 rupees per 10 grams in the third quarter on expectations the rupee will remain steady against the U.S. dollar or even reverse from its record low struck in mid-June.

"Some appreciation could be seen in rupee in the coming quarter," said Pranav Mer, senior analyst with Mangal Keshav Commodities.

The rupee could firm due on expectations of bigger dollar inflows into the stock market, Mer said. The rupee plays an important role in determining the landed cost of gold, which are quoted in dollars.

For prices in different currencies, click http://link.reuters.com/cyv95s

For graphic of India, China demand, click http://r.reuters.com/xem66s

JEWELLERY KINGS

Analysts expect the amount of recycled scrap to jump 66.7 percent to 25 tonnes in the third quarter as higher prices entice traders to melt their old into newer designs.

"People have already liquidated scrap in the second quarter. They will wait to sell more scrap for the higher prices of 31,000-32,000 rupees," said Mayank Khemka, managing director with Khemka Group, a wholesaler in New Delhi.

Indians are estimated to own about 20,000 tonnes of gold, about three times higher than the holdings with the U.S. Federal Reserve, in the form of jewellery, coins and bars, which consumers melt down to take advantage of any spurt in prices.

China's old scrap supply stood at 124.7 tonnes, the second biggest after the United States, while India's recycled supply stood at 57 tonnes, nearly half of China's.

"At a time imports are getting restricted, people with jewellery are the kings," said an official from bullion importing in Mumbai.

(Editing by Miral Fahmy)

image
Business Standard
177 22

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