After the fall in crude prices Guar gum was hit worst that Guar seed. Guar seed remained stable due to Guar Korma and Guar Churi prices. Crude oil is also stabilizing above 50 USD/ barrel. In last 5 month Crude has been costlier up to 70 %. In primary prediction World Bank estimated that this year average crude prices would 37 USD/ barrel. But Now World bank has revised it from 37 to USD 41/barrel. By the end of August crude will traded above 60USD/Barrel.
During this period Guar seed has also recovered more than 5 % from 3050 to 3200. It is showing stability at this level. In Jodhpur market Guar seed is traded at RS 3200/ 1000 Kg. Guar churi and Guar Korma is giving very good support to Guar seed prices.
This year the quality of the guar seed will be also very poor. In high humidity conditions we can see more than 70 % failure of Guar crop specially due to Bacterial blight. It is very severe disease and within 4-5 Days it cover complete farm in favorable conditions.
Another main disease in root rot. Generally this disease accrue in those field where Guar crop is taken on repetition on same farm. Guar is grown in wide area in guar growing belt regularly since last three four years. Now there are many chances of attack of root rot.
All the commodity prices are increasing due to inflation and production cost then prices of guar will also show 10-20% growth. If the production of Guar does not remain good in this year or farmer will not get respective prices then next year three will be further drop in Guar cultivation area.
State Govt and central govt are pushing the Pulses cultivation. As per state govt estimate Guar will be sown on 36,00,000 Hectare area from total sown area of 1,53,00,000 Hectare and there is further prediction that Moth will replace 21,00,000 hectare area from the Guar area. Then Guar crop may shrink on 15,00,000 Hectare area. In this condition guar production will drop very low. Irrigated area farmer will not prefer Guar in current market condition as the opportunity cost of their land is more than the rain fed area.
Major change in Guar seed and guar prices will come in Last July and First August. In this period Guar seed sowing data will release. IF Guar touches 4500/ 100 Kg then Guar Gum prices will automatically reach to 8000 as cost of input. IF we add other cost then INR 9000 is feasible rate for Guar gum. Might be June contract can settle bit low as investor will be under pressure of settlement but major changes will be noticed on October and November contracts. If spot demand rise further we June and July contract can also jump.