Thursday, 14 July 2016
Guar moved upward direction due to low cultivation, even crude is not improving
Guar gum preformed very well in this weak. it recovered from 3250 to 3450/100 Kg and gaur gum recovered from 5750 and reached up to 6200/100 Kg. In last two days of weak it lost the upper positions with declining crude oil prices in international market. Monsoon has almost started in all the Rajasthan Sowing has started in most of Guar cultivation area. In remaining 20-25 % area sowing will complete in next week. As per primary inputs Guar is not a priority crop for farmers in this year. In irrigated are farmers are going for Maize, Cotton, Rice, Lentil, Moong, Groudnut, Bajara, in rainfed area farmers are going for Moong, Moth, Bajara, Til.
Guar gum seed cultivation area will shrink.
Guar is cultivated from Haryana to Rajasthan and Gujarat. It has also increased in other states like MP. Maharashtra, Andhra, Telangana, Punjab, This year due to low rates guar will shrink mainly in Rajasthan and Gujarat. Small area can be come from Haryana.
Traditionally guar gum was cultivated in rain fed area under low cost of cultivation condition. After the rainfall farmers used to take their camel in farm and start sowing of his in house stored seeds , there was requirement of minor weeding operation which was required to feed the grass to cattle/ animal.
Right now situation has changed Guar cultivation has become expensive. It start from sowing by the tractor, using the good quality seeds, using agrochemicals for plant protection , applications of fertilizers, at every step cost is involved today. Some market men say that farmer will go for guar but if it is loss making cultivation then he will never go for Guar cultivation.
Comparatively other crops are protected by MSP and giving good return to farmers even at market rates like Moong moth Bajara. Why farmers will go for guar cultivation in a loss making crop after paying money for cultivation.
This year cultivation area is likely to limit only 10,00,000 hectare just 1/5 of last year cultivation when market rate of guar was 5000/100 Kg and other crops rates were lower than Guar. This year Guar is trading on 3100-3200 comparatively other commodities are being sold at higher prices.
This year Guar doesn't seem to give good return to farmers in comparison to other crops and farmers are not taking interest in guar cultivation as their primary crop. Some farmer use it as crop rotation, green manure, farm development they can work go for Guar cultivation which will come under 10,00,000 hactare area.
Farmer consumption will increase.
At low price domestic consumption of guar specially used by cattle owner as feed concentrate. All the cattle feed prices are very high and they have better option of Guar to use it as feed concentrate. It is traditionally used in western Rajasthan and consumed in bulk quantity. There consumption of 100-200 Kg in one milking period per cattle up to 4500/100 Kg farmer will not have hesitation to use guar as cattle feed. If the prices remain below
Demand of Guar seed from cattle feed will increase.
At low price guar is used to produce to Guar korma which is supporting guar prices at lower level. Consumption of guar korma is increasing worldwide. Generally there is 56-58% protein in Guar Korma while there is only 41% protein in Soya protein. soya protein is costlier than Guar Korma. Guar Korma is being exported at Rs 38/Kg and Soya protein is being exported at Rs 49/Kg. Guar is having 15 % more protein and Rs 10 cheaper than Soya protein.
Quality of production ( Guar seed ) will be poor.
As per prediction this year there will be more rainfall and high humidity. In high humidity condition guar started to degrade and it turn brown or black. Even some time the Gum started to decompose. Standing crop also affect drastically. Infection of disease like bacterial blight and root rote increases in high humidity condition. Some time crop doesn't mature on time if there is more humidity in soil. Even seed doesn't dry after sowing, which are not suitable for filling in bags.
Crude oil will improve
Crude prices is the major factor which will lead guar rates to upper level. In normal condition guar can go up to 5000/100 kg if crude will support then it may reach up to 6000-7000/100 Kg. right now crude is at its lowest level and it is improving slowly and slowly. In long term crude will up to 40-50% at from this level or it will reach up to 60-70 USD/ barrel. Any positive sign from crude oil industry will make a positive impact on Guar seed prices.
Supply of Guar seed will be tight
This year there will be gap between demand and supply. In the case of price rise this Gap will be more wide. farmers and traders will hold the commodity. Already situation looks more tight and it will make it more severe. Speculators and stockist will become active and prices will move very fast.
Up to settlement of July contract there will be some pressure of supply . For long term position this level is good for making position in market. Guar will give good return in 12 months.