Saturday, 17 September 2016

Guar seed and Guar gum recovered after return of Monsoon

Guar seed and Guar gum recovered after water deficiency due to poor rainfall

Guar remain strong in this week after return of Monsoon. It started to move from 3550/100kg and one tiem it reached 3750/100kg. Guar gum also remained strong it started to move from 6500 and reached to 6900.Some local demand was noticed but major impact was from the factor of return of monsoon. Late sown crop will damage on large scale. 

Monsoon has Returned

No rainfall has noticed in Guar growing belt.  Monsoon has completely stopped. Climate is very Hot in Guar growing belt. There is no humidity in air. Dry air is blowing. Crop will dry within 10-15 Days. Initial rainfall was good but the second round and third round rainfall was very poor. Rainfall pattern was good for the early crop.  But for late sown crop patter was very bad and crop did not get even second rainfall after the sowing.

Crop Damage:

Rain fed area of Bikaner, Ganganagar, Jaisalmer, Barmer, Jodhpur is facing crop damage on large area. Around 40-50% crop will be damaged and rest crop produce will be of inferior quality. Major quality produce will come from Haryana, Hanumangarh, Churu and Some parts of Ganganagar. In these location there was early crop. Production Gujarat will be also poor. Only early sowing will be successful.

Disease and Insect Attack

No major disease and insect outbreak has noticed. This year disease outbreak conditions were not formed.  In the last stage it is dry climate and crop is safe from any major economic loss. 


No major stocking activity has noticed but as per primary inputs of low production small traders have started to collect guar from the nearby area. As per market information stockist have dispersed some money to small traders for early collection of crop. Big processors are waiting for end of September and they will start from the arrival of crop.  In the First stage around 1,00,00,000 Bags will be stocked.

Crude oil is stabilising

Crude is major factor which will decide the further price movement. No major price improvement has noticed in crude oil but it is stabilizing. Within this production cycle Crude will take a major upward movement and Guar will grow with this.

Oil rigs are Increasing

It is good news that oil rigs are increasing in USA. Growing oil rigs will require drilling chemical and demand of guar gum will increase. It is very positive sign for industry.

Stock in USA.

Ready stock in USA has come down. Right now no stock is available in USA. Last year there was problem of ready stock in USA.  Now drilling companies will have to give the order for 6 month or 12-month supply. 

Crop Estimates 

Crop is estimates around 80 Lac bags after failure of crop in rainfed area. This year irrigated crop was very less. Early crop is in good condition but most of cultivation was started in August and August crop is late crop and all the late crop are facing water scarcity.  As per estimate crop will be remain around 75 Lac bags. There is no any chances of improvement in this figure. 

Arrival of Crop

Arrival of crop has been started in Haryana specially in Adampur and Sirasa area. It is noticed that stockist are purchasing the arrival. Arival will start in Hanumangarh and Ganganagar in Next week. By first week of October arrival will start in Churu and by the mid of October will arrival will start in rets of area.

Price movement

Though the current demand is low it moving due to crop damage and low rainfall. Current upward movement will work as bridge between Stocking activity and price movement due to low rainfall. Now the prices will not fall freely by the end of November. In next week some profit booking can be noticed but overall direction will be upward.

Friday, 16 September 2016

Guar seed and guar gum is moving upward with returning Monsoon

Monsoon has about to return with in one-two days. There is no rainfall in rain fed belt of Guar cultivation. There is more loss in late sowing crop. Late sowing crop is facing the heavy scarcity of water. Right now there are no chances of rainfall crop will damage on large scale. Farmers who opted gaur cultivation in last stage are facing the drought condition.

There can be some profit booking in short term but in long term guar will recover very fast. Arrival of gaur will depend on prices of Guar. It will be very hard for traders to source guar at current level. Stocking of guar will start with initial arrival and prices will go up. After the stocking prices will move with tight supply. Supply of Guar will be very tight up to next production in October - 2017.The opening of Gaur will again up in next week. Forward contract will give additional support to Guar.

Guar prices were down due to prediction of large cultivation; Production related predictions has been stopped now. Prices will move up with loss related predictions and conditions. Situation will clear by the end of September.

Wednesday, 14 September 2016

Guar seed and Guar Gum market is in buying mood

Market has come in buying mode. Prices are moving very fast in the forward market. Physical market is in selling position. More and more commodity is coming in market above 3500 level in fear of fresh arrival of crop after two months. All the stack holders in industry are denying the govt data of Guar cultivation. This weak is very critical for the growth of crop and growth of guar rates. If there will be no rainfall then crop will damage in large geographical area and production estimate will drop down to 40% of current estimates.

Guar is very sensitive commodity with respect to demand and supply. Due to long self-life of seeds and longer storage capacity farmers choose to sell guar as last option. This year Pulses will come in market first then Guar will come in market. In irrigated area, most of farmers sell the gaur to traders against the advance, which have given by traders on credit during cropping period. As per crop cycle this is not a demand period. Demand will start after December and January. The peak arrival period will start after 15 Days. Market will run after the December.

Monday, 5 September 2016

Guar seed and Guar gum recovered from lower level.

In the starting of week Guar seed and Guar gum declined to very low level. Guar gum reached to 6000 level and Gaur seed reached to 3300 level with lower circuits due to increased cultivation area and good rainfall. But it recovered from its declined level and sustained to last level of 3500/100Kg for Gaur seed and 6500/100Kg for Gaur gum powder. Market is getting some stability.  

Monsoon will be returning back

Rainfall has slow down. There is no news of fresh rainfall. As per weather prediction Monsoon soon will returning after 5th of September. There is no news of damaged on crop due to heavy rainfall in a large area.  Early sowing crop will not require another rainfall and it got rains on all the major critical stage of Sowing, crop development, flowering.  It is at pod formation stage and there is sufficient moisture for maturity and crop will start mature by last week of September and it will dry is October. At the last of October, it will ready for Harvest. For late sowing crop this is very critical stage. It will require another lot of rainfall for the crop development and flowering, if there will be no rainfall in next 15 Days then there will be crop damage in late sowing crop. The loss can be up to 40-50% on large area. 

Disease and Insect Attach

News of insect and pest attack has started to spot. There is news from Bikaner and Hnumanagrh area that leaf spot disease has started to emerge with growing temperature and moisture. If the prices of Guar will remain low, then investment on plant protection be low and crop production will be loss. Most of guar crop is repeated crop on same plot on guar cultivation area so there are more chances of disease outbreak. This year there is more humidity so there are more chances of disease attack.

Speculators are moving out from contract.

Last week and in this week there were continuous three lower circuits and most of people who were doing speculative trading has faced heavy loss. Some people made the selling positions at lower level they are also in fear.  Genuine investors are still stuck with their positions.  This week most of agriculture commodities were under selling pressure and there was huge loss to speculative trading. It will very hard for them to re-enter in this trade.

Sowing of Guar

As per data released by the different Govt. Sowing of Gaur has reached to 32,00,000 Hectare.  Right now no final figure has released. It expected that it may further improve. Rajasthan Govt released last data on was 22nd September,2016.  The final estimated data will be compiled after release of final figure by all state Govt of Rajasthan, Haryana and Gujarat. 

Demand is stable 

Export demand of Gaur gum powder is stable. Right now it is around 30000 MT/Month or 1000MT per day.  That is equal to processing of 3450 MT guar seed per day (with 29% gum recovery). In this way there is annual requirement of 12,50,000 MT of Guar seed. Which is 2,50,000 MT higher than current production of 10,00,000 MT of guar seed.

Crude is Volatile 

Crude oil is highly volatile at this time but is moving in between 40-50 USD/MT. It is expected that crude will improve by the end of this year. If crude improved more than 60 USD than it will give a support to Guar prices and guar may touch the level of 5000 or more.

Current movement

Prices will stabilize in next week. It will more toward 4000 level. With some news of crop damage prices will keep improving.  At lowest level 3000 level is stable. In normal business prices will keep moving around 3500 level. With some positive news prices will reach around 4000/100Kg in this Month.  We may see some fall in Churi Korma prices. Falling Churi Korma prices will lead to improvement in the Guar Gum prices.

Sunday, 21 August 2016

Guar will emerge strong commodity this year due to lower cultivation area

Guar seed and Guar gum kept stuck to upper levels. Guar seed stuck the level of 3700/100Kg and Guar gum stuck the level of 6600/100 Kg e in sluggish business activities. Major business activities were sluggish due to regular holidays and close market but highly volatile trading was noticed.

Low cultivation area

Guar cultivation has almost stopped as per primary information Guar cultivation area will not cross figure of 30,00,000 hectares in whole India. As on 15th August guar has been sown on 25,78,000 hectares in Rajasthan. It has been cultivated on 1,19,500 hectares in Gujarat as on 12th August. It has been cultivated on 2,50,000 hectares in Haryana. Thus total cultivation area will be below 30,00,000 hectares. Thus the first strong fundamental is lowest cultivation area during last 7 years.

Production will be very low

In the first batch of sowing Guar cultivation area was very low it was far below than other kharif crop. In the first batch Guar could be cultivated only on 10,00,000 hectares. In best condition guar production average will be around 600 Kg/ Hectare thus there will be production of 60,00,000 bags from first batch. Crop will get good time in maturity and sufficient moisture in flower and seed formation. In second batch guar cultivation area started to improve and it reached up to 20,00,000 average productivity of second batch will be around 200Kg/ hectare. Thus there will be production of 20,00,000 Bags from the second batch. In the last batch rainfall covered the western part of Rajasthan and sowing area was added from Barmer, Jaisalmer and Jodhpur and it reached near to 30,00,000 hectares. In the last batch average productivity will be around 50 Kg/Hectare. There will production of 5,00,000 bags from last batch of sowing. As per primary estimate Guar production will be 85,00,000 Bags in good condition. In most favorable condition it may touch 1,00,00,000 Bags.

Crude is improving

Crude is life line of Guar gum industry and it get a strong physiological support from crude prices. In this week crude is getting upward movement. And it has crossed 50USD/ barrel. 50 USD /barrel is very strong fundamental support form guar seed and guar gum prices. There is major requirement of stability in crude prices above USD50 /barrel. OPEC is planning to cut the oil production to maintain the inventories in the line of demand.

Speculators are active

Speculators are active in industry in expectation of better return with improving crude prices. Speculators try to monetize every factor which is against the price improvement of guar seed and guar gum. This is time to play in grey/confused condition about production and sowing data. After one-sided condition they can’t enter in market and there is less possibility of market manipulation.

Profit booking at upper level in forward market

Ever upper circuit is leading to another lower circuit and downfall in prices. Short term investors are booking their profit at upper level and let the prices free fall. It is creating a negative movement for new investors and keeping them away from fresh investment. Though spot demand and supply is major factor which decides the prices of guar in market but processors are adopting hedging and effect of forward market reach quickly in spot market.

High volatility

As per discussion in above factor guar market is highly volatile at this time. There are two major factors behind the volatility first factor is sowing area. Guar crop is cultivated only one time in a year and this cultivation will decide the production and supply of guar seed for throughout the year. Many factor are intersecting each other and new theories related to sowing area is coming out every day. Speculators are promoting and encasing these theories. There will complete break on theories related to sowing guar after August. Some authentic figure will come in market by the end of August. Another factor is crude oil. Crude oil is highly volatile due to geopolitics and technology war. There is competition between soft oil and hard (shale) oil production. Increasing inventories of crude oil in marketing putting pressure on crude oil.  Every small and big decision related to production is leading to volatility in crude oil prices.

Current situation

At ground level all the stake holders related to guar which includes Farmer, Traders, Stockist, Processors, Exporter, end Users and Investors have got the primary inputs related to low production of guar and currently Guar is emerging as strongest commodity in comparison other commodities from guar growing belt. Bajara don’t have any major industrial application and it is not a long term investment friendly commodity. Another major segment is pulses. Pulses are already under heavy pressure of bumper production due to increased cultivation area. Third segment is oil seed. In guar growing belt oil seed in produced in large area in Rabi season specially the mustard. In this Kharif season some area is covered by groundnut but ground nut is a crop of excellent growing condition like timely watering and heavy investment in crop cultivation.  Last segment is cotton but cultivation time for cotton is totally different it is cultivated before June. Cotton is also cultivated in good soil and confirm availability of artificial irrigation water.

Crop stage

In guar growing belt early crop has started to flower. Flowering has started in lower branches with high temperature and upper branches are growing with increasing moisture.  Right now no major disease and pest attack has noticed in early crop and it is standing healthy in green condition. Late crop is growing and it is also standing healthy.  Moisture in climate in guar growing belt is not excessive.  Clod formation is not continued. If there will be 4-5 days’ continuous cloud formation, then attack of disease and pest will be start. In early stage there was attack of red hairy caterpillar in Haryana, Hanumangarh and Churu but now these insect has completed their caterpillar lifecycle.

Crop sown in very late stage specially in Jaisalmer and Barmer is facing the problem of moisture stress because there is no second lot of rainfall. After the germination there must be rainfall within 10-15 days. If this crop will not get this rainfall timely then there will loss of crop in very big area. But production point of view it is not an important belt. People go for guar cultivation due to lowest opportunity cost of land in this belt.

In short term Guar may cross the level of 4000/100Kg up to first week of September. But in long term investor may consider 5000/100 kg level up to November. At this stage guar need to cross a strong support of 4000/100 Kg level and sustain for one week. Investor must keep their existing position and they can consider to enter for long term investment for 6-12 months.  

Monday, 15 August 2016

Guar Seed & Guar Gum strengthening with end of guar sowing period and upward movement in crude prices.

Guar Seed & Guar Gum strengthening with end of sowing period and improving crude prices.

Guar Seed and Guar gum remained highly volatile. Guar business was shut down with two lower circuits and touched to 3500 (guar seed) and 6200 (guar gum) level. There was heavy rainfall in guar growing belt and some parts faced flood like situation.  Rajasthan Govt has declared the fresh data of guar sowing. As per these data guar has been sown on more than 23,50,000 hectares uo to 11th August. If the improvement in sowing area will keep going, then total sowing area will touch up to 30,00,000 hectares in India by the end of Next week. Sowing will be finished by the end of next week. As per field report sowing area is not increase as per the growth rate of Govt Data. Currently Govt data is only source of authentic and reliable with coverage on large area.

Crude oil market is also getting some support from the news of OPEC planning for freeze the production.  Crude oil has also improved in this week. It has recovered from USD 40/barrel and reached to 46 USD /barrel and this is very good supportive fundamental. As per oil and gas expert crude will stable on 65 USD/barrel with in this quarter and it will keep stable at this price up to next one-two yeas. Growing crude oil will give support to the shale oil production and companies.  Oil service companies will focus on fresh shale oil production.

Production of Gaur seed will remain tight Earlier estimate was 50,00,00 Bags as per fresh estimate it will reach up to 80,00,000 to 90,00,000 Bags. For the first 10,00,000-hectare productivity will be remain around 500 Kg/ hectare and in the next 10,00,000 to 20,00,000 hectare will be around 100-200 Kg/Hectare. This production will remain under 90,00,000 hectares. There are no any chances of improvement in production but it may go down with insect and disease attack. 

Guar growing belt will face a lot of problem in investment in pulses specially in Kharif season. There will be bumper production of Moong and Moth. Moong has already start going down toward 3000 and Moth has reached 3700/100Kg. As per market men both the crop will remain around 3000 level during next 12 months.

In this situation Guar will remain only crop which will attract local investment and stocking activity. Once the prices of gaur seed will move out from 4000 level then stocking  wilkl start and supply of guar seed will remain very tight.

Instead of external factor Guar industry is down due to internal weakness. Investors are highly volatile; Industries are more focused in future market then sport market. Instead of individual profit and loss industries are hedging their demand and sharing their profit with other processing industries and less focused on individual technical expertise and cost control. 

In long term Guar will attract a lot of global investment in processing and quality improvement. Indian guar industry still faces the problem of lack of technical expert and R&D team. Industry need to focus on industrial atomisation and quality control. Fresh investment in India is also expected in guar gum processing industry at large level.

Global player like Solvay has planning for full-fledged operation in India, Solvey has already acquired the business of Rhodia. Solvay has mainly focused on non-oil and gas Guar gum production and that is good news toward diversification of Guar gum industry based mainly on Oil and natural Gas Industry. Solvay finds Guar interesting for their future R&D projects. 

Stick with existing positions. Below 3500 level is good entry point for guar seed Gaur gum investors can enter below 6500 level. Or they can wait for next week. As after release of final sowing data of guar; one downward movement will come in Guar. Even there is holidays in next week and most of business activities will be remain sluggish and gaur may also come down. If there is any opportunity to enter at lower level, then it will be very good. 

Friday, 12 August 2016

Guar gum crop will not benefit from heavy rainfall

Rajasthan Govt has released the fresh swing data of Guar gum seed cultivation . As per these data Guar seed/ guar gum  has been cultivated on 19,26,200 Hectare till 5th August which is 53.5% of targeted area.. On the same date during, last year this figure was 34,61,000 hectares.

Market of guar seed and guar gum  is bearish due to the rainfall and expectation of increase in guar seed sowing area. In the case of Guar gum seed  it is not true. This year there is very heavy rainfall and it is bad for guar gum seed in both conditions First of all heavy rainfall is not good for guar gum seed sowing and it is also not good for standing guar gum seed crop as it will lead to excessive soil and climate moisture and further attack of disease.

Long cloudy period and heavy moisture is most favorable condition for development of microorganism responsible for disease and pest. Guar crop requires better aeration in root zone and dry climate. The result of this excessive rainfall will come after 15 days when leaves turn brown with round shape spots. It will also lead to growth of weeds. Weeds grown fast in heavy moisture and weeding of the farm will be very problematic. At this time, it is more problematic for early guar gum seed  crop. Weeds will grow very fast.

Rates of Guar has also come down and short term speculative  buyer has come out from market.  It is again best point of entry in this guar seed and guar gum contract. After 5-6 days news of damage in guar seed and guar gum will start to come. 

As per data released by Gujarat State Govt Guar has been cultivated on 1,16,700 Hectare. Which is just 30 % of Last three years’ average. Total area of Guar cultivation in increasing toward the 25,00,000 Hectare. Investors need not to worry. Total production will be very poor.  Market will face the shortage of guar seed in market. Keep away from speculative news. Guar is not a crop of heavy moisture and standing water in root zone. In some patches guar is cultivated again and again so there is a lot of microorganism in soil and they will spread in complete cluster/ farm very fast.  Market of Guar will remain volatile with weather conditions

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Thursday, 11 August 2016

Guar gum seed production will remain negative this year.

Weather is cloudy throughout the guar growing belt. There is some news that in Haryana, Hanumangarh and Churu Crops area falling due to heavy rainfall. There is loss in standing crop. Metrological department has put western Rajasthan on alert for heavy rainfall. Heavy rainfall is not suitable for sowing and this is also not goof for small crop up to 10-15 days.

Govt of Rajasthan has declared the fresh sowing data up to 6th August as per these data Guar has been cultivated on 20,42,000 Hectare land. That is 56 % of the Targeted achievement. Last 8 days this figure has improved 8,00,000 hectares. At the ground this is not possible that within 8 Days this much amount of land can be cultivated in this heavy rains. 

As per field report there is no any improvement in sowing area of high guar producing belt. But some new area has added in Barmer and Jaisalmer. Both the districts are low productive due to low productive soil, uneven rainfall and low investment in crop cultivation. 

Volatility will remain in this month up to sowing period. After 20th August sowing will almost stop. As per climate Guar crop must be mature in last of October to last of November. But crop sown in Last of August will not have time for proper maturity and drying.

Monday, 8 August 2016

Guar gum industry will benefit from competitive crude oil prices.

Guar is making good impact in commodity market. Guar is only commodity which was having lower entry point for long term investment. Investors must keep stuck their position because up to next two and half month there is no delivery pressure. In this two and half month period Guar will attract a number of investors. Fundamentally guar is very strong Existing stock is very tight and processing industries don’t have any major in house stock. Now this guar gum demand will reach in market and stockist and traders will react bullish to these fresh demands.

Demand will increase as OPEC is struggling to stand in crude oil market which is shifting to shale and tight oil production. IN USA there is different situation. Companies are closing the old oil rigs and marginal production in negative and companies are going for new oil drilling and oil rigs to increase their marginal production and profit. Companies find New oil well profitable instead of recharge the oil well in this hyper competition.

There is good news that break even prices of companies is coming down. In year 2013 the average break even price was 80USD/Barrel it came down USD70/barrel in year 2014, Which further came down to  USD50/barrel right now it has come down to USD 40/barel and It is going down with latest technology.

For example; In Permian Region of USA, oil production from per rig was 100 barrel /Day in 2012 and it is keep increasing with fracking. In 2013 it was 125barrels/Day, in 2014 it was 180barrels/Day, in 2015 it was 200Barrels/Day, in starting of 2016 it was 425 Barrels/day. Right now it is around 500 barrels /Day. This is very good improvement especially in last two years. Companies are focusing in going for new rigs to increase their marginal production and profitability. Demand of Guar will increase with this movement. Companies will go for new oil rigs to increase their profitability.

Investors can maintain their existing position and they can also make fresh investment at this level and there are more chances of better return in Guar in coming period. Guar seed is more stable and solid commodity then guar gum. There is less impact of daily inputs .

Friday, 5 August 2016

Guar prices will go up as crude oil has improved 2.65 %

Guar seed and guar gum prices will go up as crude oil is higher by  2.65 %


This report is exclusively available for members only at this time.  In this report we have provide balance sheet of guar production and consumption. We have also given the estimated production data.

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