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Saturday, 22 December 2018

How can Guar seed farmers make profit ?




Guar is a arid crop it is grown only in one climatic belt of world. More than 90% are of that belt comes on Indian and rest 10 % Area is in Pakistan. Guar is an industrial crop. It is processed into guar gum powder. Guar gum powder is used many industries due to its unique chemical and physical quality. 

Guar Farmer should take Guar as secondary crop. 

Guar farmers should not take it as a primary crop. Once it become the secondary crop then cost of cultivation will come down and opportunity cost of land increases. Profit from low cost cultivation crop will be always high. It will control the supply of crop in market. Priority crop for selling by farmers is always primary crop. Farmer will not go for urgent selling of guar crop. Commodity will be stored with farmer and there will be leverage with farmers if prices goes up. 




Don’t sell complete crop produce after harvest 

Farmer should not sell his complete production of Guar in market just after harvest. It will control the flow of produce I market. In first lot farmers should sell only 30% commodity. In the case of price rise after peak arrival. Farmers will have some quantity to encash the increased prices. 

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Always go for cleaning and Grading. 

At the time of peak arrival sell the low category material. When there is peak arrival all the material is considered as low quality. Farmers will get good price of lower quality. At the time of increased prices good quality material gives good rates over the increased prices. Generally, traders will try to negotiate at quality at increased prices to get the produce from farmers at cheaper price. 




Monitor Crude oil prices. 

Major portion of guar gum powder goes to oil and natural gas well drilling activities. If Farmers get an overview that crude oil prices are keep increasing continuously then he should hold the Guar as much as he can. It will give good return after the peak arrival. 

Monitor Guar Churi & Korma prices 

Guar Churi is by product of guar gum processing industry, which is produced up to 70% of quantity of guar seed. It is rich in protein content. Farmers purchase churi korma for their cattle regularly as cattle feed. If the prices of guar Churi Korma is increasing in market, then it is indication that prices of animal feed protein are increasing, and it is indication that Guar seed prices are stable at lower side. Guar Churi Korma is substitute of Soya Meal which is used as animal feed protein. 




Monitor prices on NCDEX. 

NCDEX is forward market. In case of future demand prices of forwards contracts remains higher than current month. Farmers will have an idea about future demand and price movement. If Future prices are poor, then there is prediction of poor demand and downside movement in coming future. Farmers can make alternative strategy in case of poor demand. 

Hedging the future high prices. 

Hedging is good strategy to manage the risk of future price fall. NCDEX provides free training to farmers for commodity trading. Farmers should make tradable (10MT / 100 Quintal in NCDEX) lot of their commodities and hedge the prices. In the case of future downfall in prices. Farmers will safe and they can sell the Guar as per hedged price. Generally hedging is opted to avoid the risk price fall.

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