Thursday, 17 July 2014
Can poor monsoon lead to increase in Guar prices ?
The monsoon has already delayed in guar growing belt. Most of guar is grown in rain-fed conditions. Guar cultivation area will shrink this year. Most of first sowing has been destroyed due to drought in rain fed guar growing belt. As per weather report there are chances that there can be drought this year. It is clear that guar production will decline this year. There can be gap between demand and supply.
This gap will work as vacuum in the market, which can further lead to increase in guar seed rates. There are chances that rate of guar can be increase up to 10,000 /100 kg. in normal condition we can expect 7000-8000/ 100 kg.
It is expected that within three days, monsoon wills started to cover western part of India, which is major guar growing belt. Currently there are two crops one crop which has been sown in the month of June, this crop has affected widely just because of delayed monsoon. Another crop, which will be sown in this monsoon.
In irrigated area, crop is standing in good condition and monsoon will lead to good harvest. Problem is rain fed area, sowing has been delayed due to late monsoon or first crop has been been destroyed. This condition can lead to the another sowing .
As per price is concerned the rate will be remain in between the bracket of 4000 to 8000. Only an abnormal vacuum can lead to abnormal price rise. There are low chances in speculation and unfair stocking activity, Central govt is regularly monitoring the stocking activities.
Trend of commodity market is also under direct lenses of govt regulators. There is not any major chances of unexpected price rise. Price will settle down with in 10-15 days. There is possibilities that from next month rate will come on regular track.