India's gold import in December 2015 is estimated to have crossed 100 tonnes following sharp increase in demand for gold during the first and last weeks of the month when prices fell sharply both in domestic and international markets . With 105 tonnes of estimated imports in December, India's total gross import in 2015 has crossed 900 tonnes, a jump of 25% over 2014. In value terms, it is nearly 12% higher at $34.980 billion, as December import bill is estimated around $3.7 billion. India imported $31.17 billion worth gold in 2014.
Sudheesh Nambiath, lead analyst with GFMS Thomson and Reuters, said "Gold demand increased in December when prices were at the lowest level this year, and as retailers increased their inventory to optimum levels, our estimate for December import is 107 tonnes." Looking at annual figures, just over 700 tonnes were net imports as the balance were duty free imports (for re-export after value addition).
Despite the sharp spurt in imports, the import bill has just gone only 12% because of a fall in gold prices in international market. Average international gold price fell by 8%, while the price oscillated in a $246 range, a nearly 20% decline from the annual high.
Another reason for lower increase in import bill is that more imports happened when prices fell below $1100 per ounce. On the other hand, a significant increase in import of dore, or unrefined gold, was happening at a premium pricing, which was occasionally a percentage over the LBMA price. Its share in supply has increased from some 15% to 30% in 2015. Mostly dore is imported at a premium over the LBMA gold PM price due to heavy competition at sourcing, given the 2% differential that refiners in excise free zone enjoy. Dore gold import in net gold purity terms was more than 200 tons as per estimates of GFMS Thomson Reuters for 2015.
Gold import in November was 98 tonnes. During March and August, gold imports had crossed the 100-tonne mark as prices were lower, according to GFMS.
Gold demand in last two weeks has again remained subdued due to inauspicious days. A bullion dealer said that, "Indians demand for gold may or may not increase even when prices are around bottom but they take inauspicious days seriously".
During the year there were apprehension about gold demand from rural sector as due to lower rains agriculture output has been impacted which in turn reduces the demand for yellow metal. However, according to Sudheesh of GFMS, "pent up demand at lower price levels and expectation for further weakening of Indian ruppee has added to the gains".
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