Purchase of silver in Nepal soars despite rising world prices

Kathmandu, Apr 4 : In Nepal, the purchase of silver has gone up tremendously despite rising world prices. The data compiled by the Nepal Rastra Bank shows that silver imports amounted to Rs 390 million during the first six months of fiscal 2007-08 compared to a mere Rs 1.2 million during the same period in 2006-07.

According to a Kantipur Report, the imports of metal increased noticeably following the enforcement of the Open General License (OGL) system on July 17, 2007, which opened silver imports to the private sector.

The import of silver has soared in spite of a decline in the export of silver jewelry, one of the major silver consuming sectors as the central bank's data shows that exports of silverware and jewelry dwindled by a huge 22.3 percent.

Wider availability of silver under the OGL system and changing public habits with more people picking up the hobby of collecting silverware have mainly driven up imports, said Tej Ratna Shakya, the president of the Nepal Gold and Silver Dealers Association. It is estimated that around 200 kg of silver was purchased daily in the country. We expect demand to shoot up to 300 kg per day with the present buying trends," Shakya said.

Silver is used mainly to make domestic utensils, decorative items and ornaments besides jewelry and other exportable items. Soaring international prices has not deterred local consumers from buying the valuable metal. Silver prices climbed to Rs 460 per tola (11.664 gm) from Rs 310 per tola over the past six months. However, the rising price has eroded the cost-effectiveness of silver jewelry and silverware exporters as they have to fulfill orders at previously agreed prices.

Meanwhile, the European Union (EU)-Nepal-WTO assistance program has been launched to increase Nepal's access to the world market by enhancing capability and quality through standardization and certification of products.

The three-year, 20-million-euro program will be implemented with the joint support of the EU, the United Nations Industrial Development Organization (UNIDO) and the United Nations Economic and Social Commission for Asia and the Pacific (ESCAP).

Secretary of the Ministry of Industry, Commerce and Supplies of Nepal, Purushottam Ojha said Nepali products were facing a number of problems in getting access to the international market due to lack of quality certification and standardization of products.

Dr. Lalith Goonatilake, Director of UNIDO's Trade Capacity Building, said that ensuring sufficient export volume, uniform quality and timely delivery of goods were the major challenges in trade participation for developing countries like Nepal.

Eduardo Lechuga Jimenez, charge d'affaires of the EU, said that after the Constituent Assembly polls, Nepal would be able to capitalize on the achievement of People's Movement II.

He said that the program would focus on building the capacity of Nepal's government agencies and private sector to increase trade access by enhancing their capability for standardization, certification and harmonization.

ANI