By  Paul Ploumis 03 Sep 2015  Last updated at  08:20:27 GMT

NEW DELHI (Scrap Monster): Weak monsoon may lead to at least 10% drop in gold demand in the country during 2015, says Ketan Shroff, spokesperson of the India Bullion and Jewellers Association (IBJA). Deficit rains are likely to impact gold demand across rural households. Traditionally, rural demand constitutes nearly 60% of overall gold demand in the country.

According to forecasts by the India Meteorological Department (IMD), the country is likely to witness 12% shortfall in monsoon rains this year. IMD further states that 2015 may turn out to become the driest year in six years. Deficient rains may reduce crop yields, which will badly impact the agricultural income of rural population in the country. This in turn may reduce fresh gold purchases significantly. The fall in rural gold demand may lead to nearly 10% cut in India’s gold imports during 2015.

The crash in equity markets has also resulted in sharp fall in gold demand. Investors are seen offloading their yellow metal reserves to generate liquidity in hand to cover up their stock market positions. The recent rise in gold prices has also made people to sell a part of their gold holdings.

Meantime, import data for the initial eight months period of the year shows that gold imports have surged by nearly 40% over the previous year to 587 tonnes. The import bill for the period Jan-Aug ’15 is estimated at around $23 billion, up 42% year-on-year. Imports during the month of August alone are estimated to be between 85 tonnes and 100 tonnes, significantly higher when compared with the imports of 67 tonnes in August last year. It must be noted that the country’s gold imports had touched 97 tonnes in July ’15.

As per jewellers, gold sales in the country are likely to gain momentum by mid-September with the advent of Ganesh Chaturthi festival on September 17th.