Monsoon will be delayed in Rajasthan by one week as per current update by metrological department Rajasthan. Initial predictions of Monsoon will remain Normal. Guar is major Kharif crop in guar growing belt. Cotton, paddy is major parallel crop in irrigated Guar growing belt. At the current price of Farmers of the irrigated belt will prefer Paddy and Cotton over Guar. MSP of Cotton is around 4300/100Kg and MSP of paddy is 1500/!00Kg. In Rainfed area, Moong, Moth, Urad are the major parallel crop to Guar growing in the same period. MSP of Kharif pulses is also high. MSP of Moong is 5575/100Kg and MSP of URAD is 5400/100Kg. Guar crop is not included under MSP.
This is last year of crop production before next Lok Sabha general election. It is also expected that Govt will procure agriculture commodities from farmers. Govt generally purchases cereals and pulses at MSP. Farmers will not go for guar cultivation in the large area. Monsoon is also expected normal so there is assurance of good crop production of other crops.
Fracking activities are increasing in the USA. Trade-war between China and USA is growing so there are possibilities that Chinese export of Guar gum and another drilling chemical will face extra duty. This imposes of extra duty will benefit Indian guar gum export business. This is the start of the fiscal year in USA, new order of guar gum will start to come within one-two months. Currently, Crude oil is little low. OPEC is expected to cut more crude oil production. This will lead to price rise of crude oil. And Fracking industry will benefit from the price rise of crude oil.
After 20th July guar seed and guar gum contract, there is no forward contract delivery up to next 90 days. NCDEX is major hedging instrument for guar gum and guar split exporters. Without delivery, It will be problematic for exporters to discover prices of guar seed and guar gum. Speculators will also remain away during this period. Overall this is beneficial that prices in sowing period are lower than in previous years. Overall gaur cultivation area will be lower than previous years. Produce of current crop production cycle will come in the month of November. Still, there are 5 months to go with last year crop produce. In near future, in next two months, there is not much up and down in guar seed prices. Guar gum prices may show the sudden effect of market demand.
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