Forward Markets Commission / Govt has lifted the ban from the trading of Guar seed and Guar gum in forward market. Two major forward market, Multi Commodity Exchange of India ( MCX) and National Commodity & Derivatives Exchange Limited (NCDEX) has started the trading from 14th May, 2010. The trader and farmers are positive about this step.They are looking that in near future the rate of Guar Seed and Guar Gum will go up.
Since one year Farmer and trader were waiting for future trading of Guar seed and Guar Gum. They were hoping that the rate will go up just because of the open trading. The future contract will be taken on higher rate.
If we compare the scenario of today and year before of the Guar seed & Guar Gum. It has completely changed. Earlier the farmer were not too much aware, they used to flood the commodity in the market and the stockist went for the stoking. The crop was a low profile crop which was mostly limited up to Rajasthan. It was very easy to play in the market.
But Now the scope of cultivation area of crop has increased Domestically as well as globally. The major are has increased in the neighboring state of Rajasthan in Punjab, Haryana and Gujarat. becouse the climatic condition are suitable for Guar cultivation, People were not taking the crop just because of the low price crop. Globally the Area under guar cultivation is coming under cultivation from Austarlia, Africa, USA and China.
New area is also increasing in the state like Andhra Pradesh, Maharshtra Utter Pradesh and Madhya Pradesh. This will also affect the supply of the guar seed in the market. The market will feel some loose supply.
But at another hand the farmer of native place of Guar from Rajsthan has become educated /aware. They have changed their way of selling the commodity. They are showing very tight supply. Now they sell the commodity in the market as per their daily requirement. This tight supply will also effect the future of commodity.
The actual scenario will be changed after five-Six Months. Just because of tight supply of Guar and Guar seed. It is hard to estimate the availability of the Guar Seed with the trader , middleman and farmer. After the five-Six month the new crop will come in the market. If the market is saturated then it will flood the market other wise it will keep going on regular track.
At the other side the Data of Export of Guar gum from India are positive. there is no any significant change in comparison to last year ( Guar gum was around 90,000/ Qt and this year 27,000 / Qt ). That is good indication. Yes there is some decline but the is just because of the stable rates. Last year initially the rate of Guar gum was 10,000/qt and it slowly and slowly it went up to 90,000 / Qt. At that time Govt banned the future trading of the Guar Seed and Guar Gum.
The Guar Gum powder manufacturer are regularly buying the Guar Gum split from the market. That also indicates the stability of the demand.
Any way removal of ban from the trading of Guar seed and Guar gum in forward market can effect the price for short term. In the Long term the demand and supply will decide the rate.
Make it clear they can be risk in stoking and manufacturing where one go for purchasing from the market/ farmer. For the cultivation point of view there is no risk. Farmer can adopt it whole the parts of plats are useful for farmer.
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