INDIA October 08 2013 5:37 PM
MUMBAI (Scrap Register): The world's biggest bullion consumer India's yellow metal demand may increase as much as 15% year-on-year to 300 tons in the fourth quarter of this year while its imports are likely to average 75-80 tons a month during October-December.
India's Gold Demand
"India's yellow metal demand may increase as much as 15% year-on-year to 300 tons in the fourth quarter of this year," said Somasundaram PR, World Gold Council's (WGC) India managing director.
Gold demand from rural India is expected to be strong this year, because of abundant monsoon rains that are expected to boost farm production and farmers' income. Farmers in India usually prefer to stash away most of their savings in gold.
“There are 20% more auspicious days and also there is pent-up demand from last quarter. Monsoon has also been good, so all indications are demand will be robust,” said Somasundaram PR, in an interview with Reuters.
Many in India shun gold purchases for a two-week period called Pitru Paksha, Sanskrit for the Fortnight of the Ancestors, when Hindu devotees honor their dead relatives. But the main festival season starts soon after. Diwali, or the festival of lights when gold buying peaks, is on Nov. 3 this year.
India's Gold Imports
India's gold imports are expected to pick up in October after a three-month slump as festival-season sales kick in, and because of a government push to clear shipments that were stuck because of confusion over new import rules.
“Imports are likely to average 75-80 tons a month during October-December,” said Harmesh Arora, a spokesman for trade body Bombay Bullion Association.
Gold imports, which remained weak for most of 2012 and early this year, suddenly picked up mid-April when global prices fell to a two-year low—India imported 142 tons in April and 162 tons in May. Demand again dropped as the rupee started falling, jacking up the metal's local price, and authorities introduced new curbs on imports to reduce foreign-exchange outflows.
According to WGC, country's gold imports dropped sharply to 100 tons in the third quarter of this year. Despite this, imports in 2013 could rise to 900-1,000 tons from 864 tons last year.