Precious metals imports rose a shocking 500% month over month to $9 billion, also a 222% increase year over year vs. May 2010!
To put these numbers in perspective- the month of May saw $9 billion in imports- India's annual yearly average is around $22 billion!
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Imports of gold and silver were at $8.96 billion in May, a growth of 500% over the previous month and 222% over last year.
``Rapid inflation is eroding the earnings of the common man. One has to understand how the import of gold has reached $9 billion for a month, while the yearly average is around $22 billion,'' said Sudhir Chakraborty, bullion analyst at Standard Chartered bank.
``The gold story is puzzling,'' added financial analyst A S Kirolar. ``Consumers are shying away from stocks and bonds and heading to safe assets like gold and real estate, but one cannot understand this given the meagre 12% growth in imports of petroleum and oil products.''
Added another analyst Shabir Lakdawala, demand for precious metals in 2010 was way stronger. ``In 2009, India had reported a 19% decline, when the worst monsoon in nearly four decades had dented bullion sales,'' he said.
Analysts maintained that India's central bank, the Reserve Bank of India's decision to grant licenses to seven more banks to import bullion has helped push up demand.
Karur Vysya Bank, State Bank of Bikaner and Jaipur, State Bank of Hyderabad, Punjab and Sind Bank, South Indian Bank, State Bank of Mysore and State Bank of Travancore were added to the list.
As of the start of 2011, some 30 banks in India have been granted permission to import gold and silver. Jewellers are getting easy supplies which is also helping push up demand.
Moreover, the flow of scrap is also expected to fall from a yearly average of 200 tonnes, which could again boost imports, underlining the insatiable appetite of the
