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Guar will emerge strong commodity this year due to lower cultivation area

Guar seed and Guar gum kept stuck to upper levels. Guar seed stuck the level of 3700/100Kg and Guar gum stuck the level of 6600/100 Kg e in sluggish business activities. Major business activities were sluggish due to regular holidays and close market but highly volatile trading was noticed.




Low cultivation area

Guar cultivation has almost stopped as per primary information Guar cultivation area will not cross figure of 30,00,000 hectares in whole India. As on 15th August guar has been sown on 25,78,000 hectares in Rajasthan. It has been cultivated on 1,19,500 hectares in Gujarat as on 12th August. It has been cultivated on 2,50,000 hectares in Haryana. Thus total cultivation area will be below 30,00,000 hectares. Thus the first strong fundamental is lowest cultivation area during last 7 years.

Production will be very low

In the first batch of sowing Guar cultivation area was very low it was far below than other kharif crop. In the first batch Guar could be cultivated only on 10,00,000 hectares. In best condition guar production average will be around 600 Kg/ Hectare thus there will be production of 60,00,000 bags from first batch. Crop will get good time in maturity and sufficient moisture in flower and seed formation. In second batch guar cultivation area started to improve and it reached up to 20,00,000 average productivity of second batch will be around 200Kg/ hectare. Thus there will be production of 20,00,000 Bags from the second batch. In the last batch rainfall covered the western part of Rajasthan and sowing area was added from Barmer, Jaisalmer and Jodhpur and it reached near to 30,00,000 hectares. In the last batch average productivity will be around 50 Kg/Hectare. There will production of 5,00,000 bags from last batch of sowing. As per primary estimate Guar production will be 85,00,000 Bags in good condition. In most favorable condition it may touch 1,00,00,000 Bags.




Crude is improving

Crude is life line of Guar gum industry and it get a strong physiological support from crude prices. In this week crude is getting upward movement. And it has crossed 50USD/ barrel. 50 USD /barrel is very strong fundamental support form guar seed and guar gum prices. There is major requirement of stability in crude prices above USD50 /barrel. OPEC is planning to cut the oil production to maintain the inventories in the line of demand.

Speculators are active

Speculators are active in industry in expectation of better return with improving crude prices. Speculators try to monetize every factor which is against the price improvement of guar seed and guar gum. This is time to play in grey/confused condition about production and sowing data. After one-sided condition they can’t enter in market and there is less possibility of market manipulation.

Profit booking at upper level in forward market

Ever upper circuit is leading to another lower circuit and downfall in prices. Short term investors are booking their profit at upper level and let the prices free fall. It is creating a negative movement for new investors and keeping them away from fresh investment. Though spot demand and supply is major factor which decides the prices of guar in market but processors are adopting hedging and effect of forward market reach quickly in spot market.

High volatility

As per discussion in above factor guar market is highly volatile at this time. There are two major factors behind the volatility first factor is sowing area. Guar crop is cultivated only one time in a year and this cultivation will decide the production and supply of guar seed for throughout the year. Many factor are intersecting each other and new theories related to sowing area is coming out every day. Speculators are promoting and encasing these theories. There will complete break on theories related to sowing guar after August. Some authentic figure will come in market by the end of August. Another factor is crude oil. Crude oil is highly volatile due to geopolitics and technology war. There is competition between soft oil and hard (shale) oil production. Increasing inventories of crude oil in marketing putting pressure on crude oil.  Every small and big decision related to production is leading to volatility in crude oil prices.

Current situation

At ground level all the stake holders related to guar which includes Farmer, Traders, Stockist, Processors, Exporter, end Users and Investors have got the primary inputs related to low production of guar and currently Guar is emerging as strongest commodity in comparison other commodities from guar growing belt. Bajara don’t have any major industrial application and it is not a long term investment friendly commodity. Another major segment is pulses. Pulses are already under heavy pressure of bumper production due to increased cultivation area. Third segment is oil seed. In guar growing belt oil seed in produced in large area in Rabi season specially the mustard. In this Kharif season some area is covered by groundnut but ground nut is a crop of excellent growing condition like timely watering and heavy investment in crop cultivation.  Last segment is cotton but cultivation time for cotton is totally different it is cultivated before June. Cotton is also cultivated in good soil and confirm availability of artificial irrigation water.

Crop stage

In guar growing belt early crop has started to flower. Flowering has started in lower branches with high temperature and upper branches are growing with increasing moisture.  Right now no major disease and pest attack has noticed in early crop and it is standing healthy in green condition. Late crop is growing and it is also standing healthy.  Moisture in climate in guar growing belt is not excessive.  Clod formation is not continued. If there will be 4-5 days’ continuous cloud formation, then attack of disease and pest will be start. In early stage there was attack of red hairy caterpillar in Haryana, Hanumangarh and Churu but now these insect has completed their caterpillar lifecycle.

Crop sown in very late stage specially in Jaisalmer and Barmer is facing the problem of moisture stress because there is no second lot of rainfall. After the germination there must be rainfall within 10-15 days. If this crop will not get this rainfall timely then there will loss of crop in very big area. But production point of view it is not an important belt. People go for guar cultivation due to lowest opportunity cost of land in this belt.


In short term Guar may cross the level of 4000/100Kg up to first week of September. But in long term investor may consider 5000/100 kg level up to November. At this stage guar need to cross a strong support of 4000/100 Kg level and sustain for one week. Investor must keep their existing position and they can consider to enter for long term investment for 6-12 months.  

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