Multi-Coloured ?barfi? sweets with silver cover are definitely a delight for all the sweet-toothed Indians. Recent reports suggest that demand for the metal paper is surging in the markets due to rising international prices.
Girish Aggarwal,?Bengali Sweet House co-owner, confesses that the silver is getting thinner as the prices keep rocketing. “We used to put five silver leaves on a batch, now we are putting on four,” he disclosed while pointing towards his cash register.
Aggarwal, whose father Bhim Sain founded the Sweet House a decade before India won independence from the British in 1947 says that silver is irreplaceable no matter how expensive it is.
“It’s like lipstick for a lady. If you don’t have lipstick, you don’t look beautiful,” he said.
Silver prices on average were under 18,000 rupees ($341.31) per kilo till 2009 and rose to 73,600 rupees ($1,395.92) in April and futures still trade around 53,000 rupees ($1005).
?The use of silver in embroidery, traditional mirrors and other leafs are quite highly price sensitive”, says Gargi Shah, metal analyst with research company GFMS, unit of Thomson Reuters.
“For example, sweets have a relatively low price point of say 200 rupees/kilo on average, but today just one gram of silver costs 50 rupees ($1), which is a fourth of the total retail price point, and hence unviable,” Shah added.
According to research company GFMS, the demand for silver leaf fell 23 percent while that of silver zari (thread made of silver), slid 40 per cent from 2005 till 2010.
POUNDING OUT PROFITS
India, maintains its position of being one of the largest importer of silver, bringing 3,029 tonnes in 2010, and double the year earlier after a weak monsoon cut demand in 2009.
“As long as the price of silver moves northwards, it will affect the use of silver in these (marginal) applications,” Shah insisted.
As suggested by Girish Aggarwal, silver is becoming thinner and thinner as prices keep towering. The soaring prices prompted many merchants of using silver mixed with other metals like aluminium and copper.
Zaveri Bazaar, being the busiest markets also observes a low business after the hike in prices. Tushar Aggarwal, the manager of a wholesaler of foils in Mumbai, says mixing Aluminium helped him bring his foil business almost to a standstill.
Silver leaf users in east Delhi are grappling with the new situation. The sweet makers pay 450 rupees for 150 sheets. Piyush Singh,?a factory owner says that in some parts of India, Aluminium is used in leaf to reduce the costs, but insists he is using pure silver.
“We are not making much margin, in fact you could say we are at breakeven only,” Singh underlined.
CUTTING THE CLOTH TO FIT
Mohit Gupta, a shop keeper in?Delhi?s Lajpat Nagar Market points to the tiny gold threads showing on the back of an opulent gold, silver and magenta fabric that proves it is hand-woven.
“Prices have increased 15-20 percent over seven to eight months,” he says. “Sales are down 10-15 percent and I think it will be stagnant for a while. People are still waiting for reasonable prices or a fall, which isn’t possible at the moment,” he added.
Finest hand?woven silk costs over 3,000 rupees ($56.90) per meter and 5-1/2 meters for one sari which sums up to a middle class chauffeurs salary per month in Delhi.
“People who used to buy 10 meters are now buying 8-9 meters. You can’t change the amount for a sari but maybe they will cut back on the meters for a dress instead. Clothes, jewellery and food are the most important parts of a wedding and they have all increased in cost,” says Gupta.
It is a known fact now and well admitted by Sayyed Mehtab Akhtar Rizvi, an artisan from Mumbai, that they mix aluminium with silver as the rates go beyond the budget.
“A sari with silver work would cost about 45,000 to 50,000 rupees ($850-950) but if we mix aluminium with silver, the cost would come down to about 25,000 rupees ($475),” he explained. The demand of traditional work is disappearing and soaring prices of silver can be attributed as one of the major reasons.
Afroz Mehndi, an artisan from Lucknow, has been working for 30 years in trade. He says only a few artisans do this kind of work and fewer new artisans are learning to do pure silver work.
Rizvi concurs, adding that most of his work now is repairs.
“We get old saris for restoration, but very few orders for new ones … There are very few orders for silver embroidery that we get now.” ($1 = 52.9637 Indian rupees)