Kathmandu, January 13
The local market has begun to witness shortage of silver, as traders have been unable to import the precious white metal due to the ongoing unrest in Tarai.
Mani Ratna Shakya, president of Federation of Nepal Gold and Silver Dealers’ Association (FENEGOSIDA), said that there is inadequate supply in the market as traders have been unable to import silver as per the demand due to ongoing border blockade by the agitating Madhes-based political parties since fourth week of September.
Only traders are authorised to import silver since October 2015. According to Bhishma Raj Dhungana, executive director of Nepal Rastra Bank (NRB), the central bank took the decision as it discovered that some banks were engaged in using the white metal for payment of goods imported from India, which resulted in under-invoicing of imports from the southern neighbour.
Import of silver plunged by massive 71 per cent in the first five months of this fiscal, against its import worth Rs 12.62 billion in the corresponding period of the previous fiscal, after the NRB barred commercial banks from importing the white metal.
Because of the short-supply, the white metal is being traded at higher rates than the price fixed by the FENEGOSIDA.
“Jewellery shops have been quoting Rs 20 to Rs 50 more per tola than the price fixed by the Federation due to short supply,” as per Shakya. The rate fixed by FENEGOSIDA for silver has remained constant at Rs 675 per tola since the fourth week of December.
“Because of massive decline in the import volume, importers have been unable to cater to the demand of big buyers — like exporters of silver jewellery,” Shakya added.
The daily demand of silver hovers at around 350 kilograms and a large chunk of the metal is used for production of silver jewellery for the purpose of export.
Exporters of silver jewellery have said that shortage of the white metal during the peak export period (October to December) has also affected the trade.
Bijaya Ratna Tuladhar, manager of Yak and Yeti Enterprises that exports silver jewellery to Europe and the United States, said that scarcity of silver has affected their export since last two-and-a-half months.
Export of silver jewellery declined by 51.7 per cent in first five months of current fiscal, against the data of previous fiscal. The country exported Rs 35 million worth of silver jewellery in review period as compared to Rs 72.67 million in same period of last fiscal, according to the Trade and Export Promotion Centre.
The amount of silver imported in the first five months of the current fiscal stood at Rs 3.65 billion, significantly lower than its import that amounted to Rs 4.13 billion in first five months of fiscal 2013-14. The import of last fiscal was substantially higher, as commercial banks had imported silver rampantly. The total import of silver had increased almost two folds in the last fiscal and amounted to Rs 24.79 billion.
A version of this article appears in print on January 14, 2016 of The Himalayan Times.