Saturday, 24 September 2016
Guar seed and Guar gum lost its major recovery due to profit booking
Guar seed and guar gum kept moving upward and reached at very good level. Guar seed reached to 3800/100kg and guar gum reached to the level of 7250 with news crop damage due to water scarcity and return of Monsoon. At the mid of week profit book leaded to further down fall in prices. After the profit booking Guar seed dropped to the level of 3650/100Kg. Guar gum dropped to the level of 7050.
In the last of week, rainfall has noticed in scattered area in small– small patches. In some belt halls storm has noticed. There are two cluster of Guar first is early sown crop area and another is late crop sown area. If there is any rainfall in the late sown crop, then it is good but it is very dangerous in the early sowing crop. Matured pod will pop up with force of wind. If there is any precipitation, then mature crop will turn black.
Late crop sown in rain fed area of Bikaner, Jodhpur, Barmer and Jaisalmenr has damaged on large level and there are no any chances of recovery. In some area of Barmer and Jaisalmer crop is delaying the flowing stage and it is growing vegetative. Crop has also damaged with halls and wind storm and a large level in productive area of Hanumangarh, Ganganagar and Haryana. Local farmers are asking administration for assessment of loss and compensation.
Disease and Insect Attack
Early crop has matured so there is no chances of disease and insect attack. But if there will rainfall and cloudy condition for 5-6 days then disease may outbreak in late sown crop area.
Stockist are active in market and buying the new crop. Processors have fear if the crop production will remain low then they will have to buy the material at upper prices and it will bite their profit. Full-fledged stocking will start around 10th -15th October, when arrival will start from all the belts. As per market men once the demand will rise then stocking will consume most of material form market.
Crude oil is stabilising
Crude oil is keep moving between 40-50 USD/ barrel. No major improvement and downward movement has noticed. Since last one year it is stabilising below 50 USD/ barrel.
Oil rigs are Increasing
This is a positive news for industry that oil rigs are increasing regularly. Major guar gum is used in fresh drilling. It is good for Industry that demand of Gaur gum is improving in market. Drilling companies are giving orders for long term supply some commission agent are creating problems and playing in market at minimum commission. Manufacturers must avoid the middle men so that prices could be negotiated directly with the end users.
Estimate of crop
Estimate of crop is major puzzle in the Industry. With different view it is at different level. People who are in downtrend are estimating 3,00,00,000 Bags. Govt is estimating around 2,00,00,000 Bags. The person who are in upward trend are estimating around 50,00,000 Bags. As per independent sources crop is estimated around 80,00,000 - 90,00,000 Bags it is as per ground reality. People are worry about the carry over stock. Carry over stock is not a major issue as market can consume/stock around 2,00,00,000 Bags for long term if market is improving.
Fresh crop arrival
Arrival has start bull fledged arrival will start around the 10th October. Before this farmer will try to sell the existing stock. Generally, in fresh arrival three is 18-20% % moisture. It will take time to dry the fresh harvest for 10-15 Days and moisture will come around 15%. Generally, Guar is stored on 12% moisture. In one-year-old crop moisture is around 10-12% and farmers get good price in comparison to new crop. One-year-old crop will come in market for processing and fresh crop will go to stocking. Arrival has started in Haryana and Hanumangarh due to rainfall it will again delay by 5-10 Days has mature crop will take another 10-15 days in drying.
It is a stable period. There are no any major chances of upward movement as there will pressure of physical arrival in markets. Prices will again reach to 4,000 level and time it will not move down. Stocking will increase with arrival and prices will not go down again. There will stability in prices and at this time there is requirement of stability. Once the 50 % arrival will complete then market will feel the low arrival and traders/ stockist will forced to increase the prices to collect more material. Arrival will also tight with increasing prices.
Guar has improved from lower level first it was stabilizing above 3100 level after it improved to 3300 level, after that its stabilized above 3500 level. Now it is stabilizing above 3600 level. Next week is very important as existing contract will either settle of these will forward to next month contract.