Indians innovate to keep a shine as silver prices soar

Wed Jan 4, 2012 3:55am EST
 
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By Jo Winterbottom

NEW DELHI (Reuters) - At the Bengali Sweet House in the centre of New Delhi business is brisk, with its silver-covered multi-colored "barfi" sweets an indispensable treat for sweet-toothed Indians.

But co-owner Girish Aggarwal admits the silver is thinner than it used to be, as the diner-style snack restaurant tries to maintain profits in the face of soaring prices for the metal.

"We used to put five silver leaves on a batch, now we are putting on four," says Aggarwal, plumped in front of the cash register in the white-tiled dining room.

Silver prices, which averaged under 18,000 rupees per kilo in the five years to 2009, hit a peak of 73,600 rupees in April, and futures still trade around 53,000 rupees.

Demand for silver in marginal uses such as leaf, embroidery thread and traditional mirrors is highly price sensitive, said Gargi Shah, metals analyst with research company GFMS, a unit of ThomsonReuters.

The two sectors -- both pretty much unique to India -- account for about 10 percent of the country's industrial fabrication, which totaled 1,979 tonnes in 2010, GFMS said in its World Silver Survey 2011.

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GRAPHIC on India's silver use: link.reuters.com/zud85s   Continued...

 
<p>A piece of silver is seen on a machine before it is turned into silver paper at a factory in New Delhi December 15, 2011. Silver prices, which averaged under 18,000 rupees per kilo in the five years to 2009, hit a peak of 73,600 rupees in April, and futures still trade around 53,000 rupees. India, the world's largest importer of silver, bought 3,029 tonnes in 2010, double the year earlier after a weak monsoon cut demand in 2009. Picture taken December 15, 2011. REUTERS/Adnan Abidi</p>