Nepal | August 16, 2020

Independence Day 2020

Gold import at five-year low last FY

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As a result of the lockdown imposed to contain the spread of COVID-19 and plummeting demand amid global price surge, import of gold slumped to a five-year low in 2019-20 fiscal which ended recently.

Statistics maintained by the Department of Customs (DoC) shows that Nepal imported raw gold worth Rs 13.46 billion in 2019-20, the lowest import since 2015-16 when the country had imported the precious yellow metal worth Rs 16.07 billion.

Compared to gold import in 2018-19 worth Rs 34.63 billion, import of the precious metal fell by almost 62 per cent. Import of gold had been increasing since 2015-16 in line with its increasing demand in the domestic market. Nepal imported raw gold worth Rs 23.23 billion in 2016-17, Rs 31.97 billion in 2017-18 and Rs 34.63 billion in 2018-19.

Stakeholders said that gold import remained sluggish in last fiscal primarily due to two reasons — plummeting demand due to constant rise in its price and the imposed lockdown which not only restricted import but also operation of the market.

“Gold has not been imported since March and banks are struggling to clear the stock of gold that were imported before March. As of today, different commercial banks have 330 kilogram of raw gold in stock,” informed Anil Sharma, executive director at Nepal Bankers’ Association (NBA) — the umbrella organisation representing 27 commercial banks in Nepal.

In terms of quantity, gold import has come down by 68 per cent in 2019-20 compared to the previous year. While Nepal had imported 7,492 kilograms of gold in 2018-19, import of the precious metal was limited to 1,400 kilogram in 2019-20.

As per Sharma, bullion traders are not purchasing gold from banks amid the slowdown in demand due to skyrocketing price. “As banks are finding it difficult to sell even one kilogram of gold in a day these days, banks will not import gold unless the stock is cleared,” he added.

Meanwhile, traders have said that they are not in a position to purchase gold from banks as there is no demand for new gold jewellery in the market. “As gold price is setting new record every passing day, people are more interested in selling their old gold jewellery over purchasing new ones,” informed Mani Ratna Shakya, former president of the Federation of Nepal Gold and Silver Dealers’ Association.

A version of this article appears in e-paper on July 31, 2020, of The Himalayan Times.

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