Saturday, 22 October 2016

Will bubble of Guar boom or blast ?

Guar cropping cycle for this year has almost completed. Crop has been harvested and most threshing has been completed remaining will be completed in this month.  Next supply will come in October-2017.  Demand for next 12 months will be completed from existing stock and current arrival.  

Crop Cultivation.

Over all crop cultivation conditions were poor for guar cultivation. The first rainfall covered only few patches in rain fed area of Haryana & Hanumangarh, Churu, Jhnjhanun and Sikar. At that time prices of kharif pulses were high and farmers were preferring only pulses like Moong and Moth over the guar crop. In these area guars was cultivation only 5 % of total sowing area. It was just 20 % of Last year crop. This crop developed very well and it was the early crop of Guar.



Next arrival of rainfall covered other parts of Guar growing area excluding Barmer, and Jaisalmer. By this time prices of pulses were high and farmers were still preferring pulses crops over Guar crop. Guar was cultivated just 30% of last year. This crop did not get the enough cultivation conditions and crop is poor in comparison to Last year except Ganaganagar due to irrigated cultivation conditions.

Some patched of Guar growing belt were still waiting for Guar specially in Barmer, Jodhpur and Jaisalmer area. By the End of August there was rainfall in these areas. Farmers preferred Guar over other crop due natural growing conditions in these area and low investment. With increasing cultivation area of pulses, prices started to come down and it reached in the range of Guar. Rainfall was very good and there was continuous rainfall for 6-7 Days. Farmers started the cultivation of Guar but rainfall pattern was uneven. Crop did not get the second rainfall in most of area. And around 60-65% crop was damaged. Productivity of rest of crop is very low around 50 Kg-100 Kg/ Hectare.



This year over all cultivation of Guar was on 20,00,000 hectares in Rajasthan and Total cultivation of Guar was not more than 25,00,000 hectares in India including Haryana and Gujarat. Overall production is expected to remain below 400Kg/Hectare as most of cultivation area was under rain fed condition and crop was damaged on large area in this belt.  Even in Haryana, major cultivation area was limited to rain-fed area.

As per primary estimate by keeping all the factor in view, overall production of Guar will be remaining around 80,00,000 Bags. Thus, production side of guar is in favour boom. Crop is poor.

Current market activities:

Arrival of guar is at its peak. Generally, by these days’ arrival reaches up to 100000-125000 Bags per day but it is not crossing 65,000 Bags per day. It is showing the actual availability of commodity with farmer. In the market traders are buying guar at Rs 3300-3400/100Kg. But in interior location small traders are buying at Rs 3100-3200/100Kg and supplying to stockist. Speculators are active and they are buying full-fledged. 




Group of traders are active in market and putting the pressure on guar prices so that it should remain low and they pick the material at lower prices.  Prices are not moving more than Rs 3600/100kg but it is also not falling below the 3200/100Kg even in this peak arrival. As per marketmen prices will improve but it will improve once the material will come out from the hands of Traders and farmers. Now processors and exporters want to stock at lower prices. Farmers and Traders want to sell at higher prices.

Demand of Guar is poor now but it is improving that’s good for guar industry. In international market, crude oil prices are improving and it is maintaining current level above USD50/barrel. Oil rigs count is also increasing. Korma prices are high and at lower side it is giving support to Guar seed prices. Except the regular demand there will be demand of Guar seed and seed for next cropping season. Next week is expected to remain sluggish for business activities. As there are holidays for 5-6 Days. 



Most of processing industries remained closed and labor and employs goes on holidays and they will return on first week on November. Arrival will go down in November and supply will become tight in comparison to the demand. Major arrival from irrigated area will be very low. Good quality material comes from the irrigated belt. As per marketmen availability of material below 3500 is good for investment for next 6-12 Months and Guar will give good return from these levels. Guar is still strong commodity in comparison to other Kharif commodities specially in Guar growing belt.

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