Saturday, 15 October 2016

Guar remained stable even arrival is increasing

Guar remained stable but it dropped at weekend with increased arrival. In this week Guar remained around 3500.  Arrival of Guar seed in increasing from guar producing belt. Market is in buying mode and prices are stabilising at current level.  There is also additional pressure of contract settlement in October month. 

Maturity of crop.

Crop has matured in most of area and farmers are harvesting it. No rainfall has noticed and that is good for crop drying and maturity. Harvesting has completed in irrigated belt. Farmers in rain fed belt are still harvesting manually. Before Diwlai most of harvest will be completed and cropping cycle will finish. Arrival will keep increase up to Diwali and it will remain peak arrival up to 15th November.

Stocking

Stocking activity has  started with the increased arrival and it will keep going full-fledged up to December. 50 % of arrival is coming markets for selling and 50% material is diverting to stockist through small village level traders. This year estimated production of Guar is around 80 Lac bags.  40 -50 Bags bags of material will be stocked up to November. Current prices of Guar are good for long term stocking for 6-12 months. There is no any major chances of prices fall. 


Crude oil is improving

Crude oil is maintaining its level above USD50/ barrel. It is good for Guar industry. A long term stability will give support to Guar gum prices.  Guar gum prices will further give support to guar seed prices.

Estimate of crop

As per information coming from different sources. Estimate of guar crop will remain below 1 Crore ( 10 Million)  bags this year. A tentative estimate is coming around 80,00,000 Lac ( 8 Million)  bags. Total Guar gum industry will depend on this arrival up to October 2017. Since It is a monopoly crop of India and there is no any other source of guar production globally except small portion from Pakistan. 

End of October contract in NCDEX.

October contract will finish on 20th October and there will be some settlement pressure on Guar prices with increased arrival in physical market. Its will settle between 3400-3500 level. 



Price movement.  

Physical arrival has increased in market and there will be some pressure on prices but due to low production and strong buying prices will remain stable around current level of 3400/100Kg.  With peak arrival prices will remain around the current level.  Prices of crude will give further support to the guar gum prices. 

There are no any chances of Major gain before Diwali. After Diwali arrival will slow down and prices will move upward. If all the factors remain positive, then November contract will settle around 4000 /100Kg of more. It is good time and Good price for physical stock. There is also news of increase in export of Guar gum powder during last month.  

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