13 April 2006

Silver importers fail to cash in on price boom- The Economic Times

Silver importers fail to cash in on price boom- The Economic Times: "AHMEDABAD: It’s nothing short of an irony in the silver trade. When silver trade is relishing the booming price and a growing demand of the white metal at the retail level, importers who placed big import orders last year are left with huge inventories following the release of cheaper silver from the government mint in November last year.

Many importers are now resorting to re-export — selling back to the overseas supplier — without making a penny. There’s no silver lining in sight either. Physical delivery of almost half of the government’s quota is yet to be done.

In past two months or so, around 400 tonnes of silver have been re-exported by silver importers, and more re-exports are expected in the next two months. In all, about 600 tonnes of silver is expected to be re-exported.

The government sold silver at Rs 13,000 for a kg even as the international price then was Rs 14,500 for a kg. As a result of the price differential, the silver importers who had placed import orders by then, failed to find buyers and are now exporting it back to their international suppliers.

Two major silver importers, Aryavart Impex in Ahmedabad and MD Overseas in Delhi have re-exported part of their imports in the last 45-60 days.In November, the Centre had decided to release about 1,200 tonnes of silver from its reserves at lower than the international price.

“Though orders for all 1,200 tonnes silver have been placed, physical delivery of only 50% silver has taken place so far,” sources in the industry told ET. MMTC, one of the agencies through which the government has decided to off-load silver, is hoping to complete the physical delivery in the next two months time.

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