Monday, 5 September 2016
Guar seed and Guar gum recovered from lower level.
In the starting of week Guar seed and Guar gum declined to very low level. Guar gum reached to 6000 level and Gaur seed reached to 3300 level with lower circuits due to increased cultivation area and good rainfall. But it recovered from its declined level and sustained to last level of 3500/100Kg for Gaur seed and 6500/100Kg for Gaur gum powder. Market is getting some stability.
Monsoon will be returning back
Rainfall has slow down. There is no news of fresh rainfall. As per weather prediction Monsoon soon will returning after 5th of September. There is no news of damaged on crop due to heavy rainfall in a large area. Early sowing crop will not require another rainfall and it got rains on all the major critical stage of Sowing, crop development, flowering. It is at pod formation stage and there is sufficient moisture for maturity and crop will start mature by last week of September and it will dry is October. At the last of October, it will ready for Harvest. For late sowing crop this is very critical stage. It will require another lot of rainfall for the crop development and flowering, if there will be no rainfall in next 15 Days then there will be crop damage in late sowing crop. The loss can be up to 40-50% on large area.
Disease and Insect Attach
News of insect and pest attack has started to spot. There is news from Bikaner and Hnumanagrh area that leaf spot disease has started to emerge with growing temperature and moisture. If the prices of Guar will remain low, then investment on plant protection be low and crop production will be loss. Most of guar crop is repeated crop on same plot on guar cultivation area so there are more chances of disease outbreak. This year there is more humidity so there are more chances of disease attack.
Speculators are moving out from contract.
Last week and in this week there were continuous three lower circuits and most of people who were doing speculative trading has faced heavy loss. Some people made the selling positions at lower level they are also in fear. Genuine investors are still stuck with their positions. This week most of agriculture commodities were under selling pressure and there was huge loss to speculative trading. It will very hard for them to re-enter in this trade.
Sowing of Guar
As per data released by the different Govt. Sowing of Gaur has reached to 32,00,000 Hectare. Right now no final figure has released. It expected that it may further improve. Rajasthan Govt released last data on was 22nd September,2016. The final estimated data will be compiled after release of final figure by all state Govt of Rajasthan, Haryana and Gujarat.
Demand is stable
Export demand of Gaur gum powder is stable. Right now it is around 30000 MT/Month or 1000MT per day. That is equal to processing of 3450 MT guar seed per day (with 29% gum recovery). In this way there is annual requirement of 12,50,000 MT of Guar seed. Which is 2,50,000 MT higher than current production of 10,00,000 MT of guar seed.
Crude is Volatile
Crude oil is highly volatile at this time but is moving in between 40-50 USD/MT. It is expected that crude will improve by the end of this year. If crude improved more than 60 USD than it will give a support to Guar prices and guar may touch the level of 5000 or more.
Prices will stabilize in next week. It will more toward 4000 level. With some news of crop damage prices will keep improving. At lowest level 3000 level is stable. In normal business prices will keep moving around 3500 level. With some positive news prices will reach around 4000/100Kg in this Month. We may see some fall in Churi Korma prices. Falling Churi Korma prices will lead to improvement in the Guar Gum prices.