Wednesday, 25 March 2015

Guar Seed &Guar Gum may become hot commodity, If demand rises from other than Oil &Natural Gas industry

During this week Guar Guar gum seed and Guar gum prices are improving slowly and slowly in future market as well as in spot market. If we analyse the entire factors we will find that things are not in favor of prices rise. First time in history there are crude oil inventory crises in USA. There is over production of crude in USA. This over production is continuing means there is not storage available for new production. In coming future crude prices may crash to a new lower level of this year. Demand of new guar is not so hot. Existing contract may keep going but there are lesser chances of further demand rise. 

      Guar gum seed prices in sport market from 1st October, 2014 to 25th March, 2015.

At Supply side there is sufficient production and there can be a carry forward of 15’000’000 Qt Guar seed (15 Million bags) for year 2015-2016 from year 2014-2015. In worst case scenario there is sufficient stock of guar seed to cover the demand of guar gum domestically and internationally. As per early data released by Govt we find that there will be good monsoon during this year. Cotton is parallel crop of guar, which is also not preforming well. 
During this year farmer will prefer Guar over cotton especially in irrigated area. International rating agencies are giving prediction of improvement in Indian economy. It will lead to Rupee strengthen against USD. If INR will strengthen then there will be low Rupees inflow.

Mature guar crop ready for harvest in Farm in Rajasthan 
There is hope from domestic consumption. At lower price, application of guar gum may increase in other industries. At low price Guar gum will be affordable for other industries. If total share of other industries  increase up 50 %, than oil and natural gas industry, then guar guar may become a hot commodity for long term basis. Guar meal and Guar Korma will also give a strong support to guar seed prices. Currently guar Korma and Guar Churi is preforming very well in comparison to last years and guar gum. Churi Korma will always work as base line for Guar seed price.

No comments:

Post a Comment