Saturday, 2 July 2016
Guar seed cultivation area will replaced by other crops and it will shrink drastically
This year Guar cultivation area is shrinking drastically. Farmers are avoiding Guar crop after two year long downfall in guar seed. Farmers are more focused on other kharif crops than guar crop. In rain fed area of Rajasthan farmers are preferring Moong and Moth. In irrigated area of Gnaganagar and Hanumangarh there is no irrigation and no primary rainfall. Farmer may consider Guar as prospective crop but it will be under rain fed conditions. In Haryana Farmers are replacing guar gum crop with lentil, Maize and Bajara crop.
Guar gum seed cultivation area will go down in rain fed area.
In some rain fed area there was pre monsoon rainfall and farmers have sown Moong Moth and Bajara crop. In one 50 km long patch from Rajgarh to Jhunjhanun there is more than 80 % sowing under Moong crop. In some patches there is Bajra crop cultivation. There was hardly any farm which is under guar crop cultivation.
While discussing with a small trader located at Haryana Rajasthan border. He said that farmers are not touching guar crop just because of low rate of guar. Mostly farmers are putting Moong seeds Few farmers are going for Bajara Crop and hardly there is any farmer who is going to Guar crop cultivation. Local market may face a lot of scarcity of guar seed. Though major cultivation of Guar crop start in July as it is sown as late crop. But if major cultivation area will filled by other crop then Guar will not find space for cultivation.
Remaining farmer will also make mood same as other neighboring farmers. Arrival of Guar will dropped up to 80% in Rainfed area. As per current area Guar will share more than 10% of total cultivation area in Rainfed area. Share of Rajasthan in Guar production will increase up to 90% but total production from Rajasthan will drop down.
In Haryana Guar cultivation area us replaced by Bajara, Maize and Lentil.
Farmers in Haryana are not preferring Guar crop they are replacing Guar cultivation area with Bajara, Maiz and Lentil. Water was available in farms timely and most of cultivation is coming under these crop in Guar cultivation area. Now there is minimum chances of changes in trends. Share of Haryana in guar cultivation area will drop up to 2-3 %. Generally Harayana is considered as supplier of best quality guar gum splits. Guar gum split and guar gum powder Industries located in Haryana will be depend on Rajasthan guar production. It can be also increase in raw material cost of industries located in Haryana. Guar gum split and Guar gum powder industries located in Siwani will not affected but industries located in Bhiwani, Hisar and Adampur will face some supply problem.
Punjab will have very low Guar production area
In recent year Guar was cultivated in Punjab. But farmers are saying good bye to Guar. Most of guar gum seed cultivation area is replaced by the Rice / paddy crop some area has gone under Lentil and Maize. Share of Punjab in Guar cultivation area will drop down to 1-2%.
Gujarat Guar cultivation area will drop
In Gujarat farmer will also replace guar crop with other Kahrif crop like Cotton, Bajara and Groundnut. Share of Gujarat in Guar cultivation area will drop up to 7-8%. Farmers have totally demoralized with Guar seed rate in local market.
Current situation of guar seed and guar gum
Industries are purchasing Guar seed regularly. Most of Guar split mills which are more than 4-5 years old are running in full capacity. Farmers are regularly carrying guar to mills. Industries are processing it and selling Guar Churi, Guar Korma at higher rate. Some new industries like Guar Korma roasting, grading, cleaning and shorting has come in existence and they are using latest technology for shorting and roasting. There is full fledged export demand of guar korma and Guar churi. Guar korm is exported regularly with good demand.
There is regular demand of Guar seed in market at current rate. These industries don't want that Guar seed rate should go up. At current situation there is low demand of Guar gum. If the rate of guar seed goes up then it will hard for them to get margin. There is also some market news that local companies have purchased the Guar Gum from market. In last week there have been buying 3000 MT guar gum split in local market. This is a export oriented buying.
Crude oil is fluctuating and it is not maintaining the level above 50 USD. 50 USD/ barrel is psychological level for Guar seed rate growth. Crude oil will come out from the fluctuation and it wil give support to Guar gum and guar seed prices.
Guar seed prices will remain under pressure in next month. Once the sowing will complete then Guar seed prices will take upward movement. Crude oil prices will be major factor which will impact Guar seed prices. Prices of other cattle feed production Khali, Maize, Bajara, Chapad will also give a boost of guar prices. Major factor will be prices of Soya protein. Guar korma is used as replacement of Soya protein.
Fundamentally guar is very strong production side there will be unexpected down fall in quantity and quality both. If the quality is not good then more guar seed will require to produce the same quality of Guar gum split. Long term positions can be made at list for three - four months. Next year in January and February the picture will be very different. If people go for one year positions then there is certainly multi fold returns whether in this year or in next year.
Up to 15th July or July contract there will be some sluggish movement but after it Guar investor will be at safe position.