SILVER NEWS

India's silver jewellery exports grow in the US

Traders say silver exports are set to zoom as the price of gold continues to rise.

MUMBAI (MINEWEB) - 

Silver appears to be the hottest precious metal on India's export block at the moment.

Traders said jewellery exports to the US, one of  the country's major export destinations, have hit a new high. "More and more people are turning to silver jewellery these days. The high price of gold coupled with the economic slowdown across the region appear to be the major culprits," said silver exporter Rajeev Thadani.

For the month of March, when the gold jewellers in India were on strike for 21 days, silver exporters in India reportedly shipped jewellery worth $105 million (Rs 5.6 billion) as compared with $69 million (Rs 3.6 billion) in March 2011.

"The high price of gold appears to have deterred many consumers in the US and across Europe from making any fresh purchases. This is proving to be a major boon for silver jewellery items, which are being picked up at major retail outlets," said Mansoor Khan, silver retailer.

He added the many export houses had received big orders from their clientele in Europe and the US.

Analysts are also bullish on the white metal.

Data from the Gems and Jewellery Export Promotion Council reveals that during 2011-12, silver jewellery exports grew to 44% compared with gold jewellery export growth of 30%. A new class of buyers has also emerged in the West, the council's data showed with consumers eager to invest less than $100 for jewellery articles.

Silver jewellery exports for FY12 stood at $694 million (Rs 36.81 billion) as against $484 million Rs 25.67 billion) in FY11. 

Prithviraj Kothari, president of the Bombay Bullion Association said he was very bullish on silver and that the country could export more this year than last year. "From an investment point of view, if there are more jitters around as seen in Europe and the US, investors in both the regions would turn to park their funds in gold and silver. And jewellery articles are a big investment option these days," he said.

Jain added that the swing in global risk sentiment, the prevailing crisis in Eurozone, tension in the Middle East, especially in Iran, and movement of the dollar would be key factors to determine the price of the precious metals. 

"Though gold has universal acceptance and remains a desirable investment option despite prices jumping 120% in the past three years, in the short term consumers will turn to silver. This has clearly been seen with exports of silver jewellery from India," he said.

Khan added that the jump in sales was recently also quantified by a Nielsen/National Jeweller survey. The Silver Promotion Service of the Washington-based Silver Institute recently released the third of its annual surveys of silver jewellery sales with sales growing overall in 2011. Some 77% of surveyed jewellery retailers reported that their 2011 silver jewellery sales increased and 27% of those surveyed experienced an increase of more than 25%.