Guarseed/Guargum Plunged This Week On Better Crop Prospects

MUMBAI (Commoditiescontrol) - Guarseed and Guargum prices slumped sharply during the week ended Friday at the benchmark Jodhpur market of Rajasthan after good rainfall in Guar producing belts of Rajasthan raised prospects of Guar crop followed by bearish cues from futures.



Guarseed prices at the key Jodhpur market slipped 7.90% to Rs 3,700/100kg, whereas Guargum lost 7.25% to close at Rs Rs 7,910.

The sharp slump in prices were attributed to good rainfall in Guarseed growing regions of Rajasthan that has raised prospects of good production as crop was in urgent need of rainfall due to dry spell in period of August. However good precipitation this week has now provided much needed moisture to the crop and late sown crop will be benfited.

The crop was under stress in Bikaner, Hanumangarh and Sri Ganganagar, 50% production share in Rajasthan, but recent rainfall has now turned out to boon for the crop.

The yield of Guarseed is expected to rise at least by 20% to the late sown crop, however there is doubt about yield for early sown crop due to bad condition of plants amid prolonged dry spell.

Now the next two to four weeks will be very crucial for Guar crop as it will decide the yield and thus buyers have opted to stay sideline amid uncertainty about price bevaviour in the near term.

Demand for Guargum during the last couple of month (July-August) said to poor after robust export in April-June 2017, which is also acted as negative factor for weak tone on Guarseed and Guargum.

Demand in Guargum is very poor at the higher level and with decent stocks of Guargum with crushers there demand for Guarseed is likely to remain subdued in the near term. Further now with prospects for better Guarseed production next season 2017-18 (Oct-Sept) there is higher possibilities for Guarseed and Guargum to trade bearish until and unless demand for Guargum rises sharply or any losses to Guarseed crop.

Though there is no official data about Guarseed supply-demand available, but trade sources belives that Guarseed ending stocks for 2016-17 season could be any where between 1.3-1.45 crore bags (100kg each) against 1.50-1.75 crore bags last year.

Since there is ample stocks available in the country there is least possibility of any sharp rise in price unless Guargum export rise strongly or singificant losses to crop occurs.

On futures, Guarseed October futures dropped 9.68% to Rs 3,824/100kg this week on the National Commodity & Derivatives Exchange Ltd (NCDEX), whereas Guargum October delivery contract plunged as much as 8.64% to Rs 8,071. The most of the losses in Guarseed futures was witnessed during Thursday and Friday as prices declined 4% (lower limit) each session due to strong selling after good rainfall in Rajasthan.

(By Commoditiescontrol Bureau; +91-22-40015533)