Guar and Guar gum prices movement.

Last month (January-18) was very good for Guar and Guar gum. Guar seed and Guar gum got good support from increasing crude oil prices. Prices of guar seeds reached up to 4700/100Kg. During the first week of February prices of guar seeds crashed with falling crude oil prices. It has reached to 4505/!00Kg. There is around 5 % fall within the week. Exporters, Traders, and farmers are worried about this downward movement. If prices reached from 3500 to 4500 it is ok, but if prices decrease from 4700 and reached to 4500 defiantly it makes worries to anyone. 

What does falling crude oil means? 

People are trying to put Guar and crude in the same track. It not always true. When the prices of crude oil were increasing then there was demand. New oil drilling started with increasing crude oil prices. Guar was used in that activities result of the same in front of us. Inventory of crude oil has increased. That’s why prices of crude oil are down. Here it is clear that there is the demand that’s why oil drilling companies have increased the production. Crude oil prices are down due to increased shale oil production. There is no role of OPEC. OPEC has agreed to cut down its production till march and at next level negotiation OPEC want oil cut extended up to end of 2018. If prices of crude fall, then it is an indication that Guar gum is being used in shale oil production. It not an issue of concern. 

How will MSP of Kharif pulses impact Guar

This was the last budget prepared by current BJP Govt. BJP will have to face election in March 2019. Before election BJP will give some financial benefit to farmers. MSP is one of the best ways to assist farmers financially. Rabi season is going on. It is not taken widely through our country but Kharif or summer season crop is taken throughout the country. Govt will declare increased MSP of Kharif pulses. In Guar growing belt Moong moth are major Kharif pulses. If the MSP of Moong is kept around 6000/100Kg and Guar prices will remain below 5000 then farmers will not go for Guar cultivation. There are maximum possibilities that govt will announce good bonus on Kharif pulses. If the sowing of Guar will remain lower, then prices will increase before the arrival of next crop in November-2018.

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Last year stock. 

As per marketman, last year stock is around 80,00,000 Bags. This much of quantity always remain in the market. This year production figure is also same which is around 80,00,000 Bags. Like previous year quantity, Stock of Guar always remains with farmers, stockist, and millers. The current arrival of guar seeds is around 17000 bags per day. But 70 % material is coming from last year stock, this year crop produce is laying with stockist, traders or big farmers. It will not come till next crop arrival even if the prices reach to 6000. This year material has reached in warehouse sat initial stage at a lower price around 3300/10kkg. This stock will not come out even the prices crushed downside below 4000. 

Export of Guar gum

Export of Guar gum is around 40 % higher than the previous year up to December 2017. It is expected to remain higher during rest of year in comparison to last year. Export of Guar has also high in January month actual data will come in March month. As per exporters, there was good export during January month January. 

Monsoon predictions in May-June 

IF the early prediction of monsoon remains poor then prices of Guar will increase. If it remains normal and good, then prices of that time will keep going. As per primary inputs monsoon is expected to remain poor. The arrival of first rainfall in May June will be also a crucial factor. Farmers need not worry. Over prices of Guar has gone up in this season. It is poor supply period peak arrival period from farmers has already gone. 

Oil rigs are increasing: 

As per industry experts, oil rigs are increasing continuously in the USA. It is very positive news for Indian Guar gum industry. The demand of Guar gum powder will increase. 

Farmers or traders must keep in mind that this year production is lower than the previous year. The demand of Guar gum is also very high. Export of Guar gum is also higher than previous years. Prices of Guar and Guar gum is also increasing. The new crop will come after 8 Month up that time existing stock will be used. MSP of Kharif pulses is expected to remain high. Crude oil prices are going down due to the production of Shale crude oil. Guar sowing area will come down due to higher MSP of Kharif pulses. Oil rigs are increasing in the USA. Most of the factors are positive for future growth of Guar and Guar gum price. As per Energy Information Administration (EIA) Currently USA, crude oil production is around 10.25 Barrel per day. It is expected to rise by 11.2 Million Barrel per by the next year. This year Guar arrival as started at Rs 3300/Kg. Generally, 2Nd and 3Rd week remain under pressure. Price will not always move in one direction only. The physical market is strong due to stock at lower level and market fundamentals are also strong behind guar price.

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