Arrival of new Guar Seed crop has started in local agriculture markets (Mandi).

Arrival of new Guar Seed crop has started in local agriculture markets (Mandi). Harvesting of guar seed crop has started in irrigated belt special Ganganagar, Hanumangarh and Haryana. New crop of Guar seed has started to arrive in local agriculture markets. Arrival of guar seed is good in irrigated belt and arrival is poor in rainfed area. Quality of guar seed in Haryana belt is poor, as guar seed has turned black due to heavy rainfall. But there is no major difference in prices in black seed and normal seed. Traders are purchasing the arrival with normal seed. Guar crop has sown late in rainfed area, so guar seed arrival has not yet started in local markets. Arrival of guar seed may take another 10-15 days in full arrival. There is report that minor quantity is coming local markets in rainfed area. 

Market man are estimating that there is production of 50-60 Lacks bags (100 kg each) of Guar guar seeds. Govt data are estimating that there is sowing of guar seed on 34,18,000 Hactare till 24/09/2018. This year rainfall was poor and uneven in rainfed area, so productivity of guar seed is expected to remain low. 

Export of Guar gum is also higher than previous year. Demand of guar gum is increasing in USA. Fracking activities are increasing in USA. This year 10% more Oil rigs are functional than previous year. Crude oil prices are increasing in international market. Crude oil price is increasing continuously, and it has reached more than USD 84 /barrel. Though WTI crude oil is around 73 USD/barrel. USA has put restriction on trading of Iranian oil. There is tight availability of crude oil is global market. 

Matured Crop

There will be arrival pressure on guar seed and guar gum prices for next two months. If the guar seed arrival is local market remains poor in next 15-20 Days, then prices of guar seed and guar gum will increase. Guar is taken only in one season so, exporters and stockist will have to buy and stock guar commodity in this season only. China is largest importer of soya meal from USA. This year there is trade dispute escalation between China and USA. Guar korma will get good market in China. If Guar protein/ Guar Meal gets good market potential, then guar seed prices may rise further from the current levels. 

Till August 2018 there is export of 2,22,055 MT of Guar gum which is higher than previous year. In monetary terms there is export of guar gum of 301 Million USD or 2039 Crore Indian Rupees.

Guar gum industry is being hurt by speculations in commodity market

India is the largest producer of guar seed and major exporter of guar gum to international market. Guar gum is a major farm export from India. There are various industrial application of this agriculture produce. Major demand of this farm product arises from Oil and Natural gas industry for the fracking process. Industry representation organization and Govt is not giving proper attention to guar commodity. Guar gum is not negligible commodities. Indian has exported Guar gum products of 70,774 crore Indian rupees from Year 2011-12 to current financial year 2018-19. This is only export revenue. Beside this industry is also generating revenue in domestic market. 

As per market information and input from farmers, it is expected that guar seed production will remain lower than previous years. Marketmen are estimating that production of guar seed will remains around 50-60 Bags. Poor climate and weather condition has destroyed the crop in many patches.  Rainfall is uneven and poor in Guar growing belt. Crops is wilting due to water scarcity. In day times leaves of plants shrinks. There is poor water arrival in irrigated guar growing belt of Ganganagar and Hanumangarh. 

Market is taking speculative movements. Export of guar gum is higher than previous year for the same period. Crude oil prices are increasing regularly. Demand of guar gum is also increasing. Guar market is under pressure from speculative movements without any strong fundamental. Rupee is also falling against the dollar. All the international shipping charges are paid in USD, so the importer/exporter will have to pay more money for shipping.  

Speculators are cutting the upper position in guar seed and guar gum in NCDEX. It is putting pressure on local market. There is 60-90 days gap in arrival of fresh guar crop in market. Farmers and traders should not come under pressure from selling pressure in NCDEX. It is time to keep guar commodity out from NCDEX. Since guar is produced only in one reason so it is very easy to manipulate the data and track the movement between NCDEX and Physical market. Speculative people swap the margin by tracking and spreading the information. This platform also gives a leverage to importer over exporter in negotiation of prices. Farmer, processor, exporter and traders; whop are real stakeholders in this guar industry, goes in loss due to speculations and profit swapping.  Some where it is hurting the international trade.

Stability in current Guar seed and Guar gum prices due to prediction of poor rainfall.

There is cloudy weather in this week, there are also news of some rainfall in few places in guar rowing belt. Due to this improvement in guar cultivation conditions, prices of guar seed and gaur gum crashed in this weak. All the stake holders are worried about the future movement of guar seed and guar gum prices.   Since it is cropping period, so prices will keep flactuating with the different climatic conditions.  As per reports current ongoing rainfall are not enough, ether it is scattered, or it is very low.

There are also news that Guar cultivation data released by Rajasthan govt is near to target of 35,00,000 hectare guar cultivation.  As per recent statistic till 24/08/2018 there is guar seed cultivation on 30,65,000 Hectare area. There are no more chances further increase in this figure as sowing of gaur has almost completed. Currently lower side of guar seed is strong in local market. Price will again move in upward direction. There are four months to come the new crop. There are buyer in physical market at current prices. Crude oil prices are also increasing in international market.

Last week group of guar stake holders did a field visit in Guar growing belt from Jaipur, to Sikar, Churu, Hnaumangarh, Shri Ganganagr, Sirsa, Hisar, Bhiwani, Jhunjhanu Districts. It was observed that Guar crop was not good in rain-fed area, plants were very small there was immediate requirement of rainfall. Height was not more that 1.5 feet. Biological growth of plants was also poor. In some farms there was attack of bacterial blight and Alternaria leaf spot. In irrigated area specially Hanumangarh, Ganganagar situation was also poor. There is shortage of water in canal.  Many of guar farm in irrigated belt were under rain-fed agriculture practices. Damage was also noted in some irrigated belt in rain-fed Guar. Crop wilting due to low moisture in soil and environment.  Some news paper have also published the report of crop damage. As per an early estimated this guar production should be around 50-60 lac bags of 100 kg each.

Guar seed and Guar gum prices are strong in the local markets. Market prices of Guar seed and Guar gum are quoted higher than NCDEX. Forward trading of Guar seed and Guar gum is also strong with buying demand and poor rainfall in guar cultivation area. Good quality of guar seed is traded at Rs 4200/100 Kg and average quality guar seed is traded at Rs 4100/100 Kg. Standard quality guar gum is traded at Rs 9000/100 kg. In interior location, guar seed is traded up to 4000/100 Kg. Guar seed is being traded strongly in the future market. At NCDEX (National Commodity & Derivatives Exchange Ltd) guar seed-10MT is traded at Rs 4610, 4641 higher by 0.62 percent or INR 55/100 Kg, 0.62 percent or INR 56/100 Kg with open interest of 61305, 3950 for October and November month contracts.

Guar gum is also traded strong in the future market. At NCDEX (National Commodity & Derivatives Exchange Ltd) Guar gum- 5MT is traded at Rs 4183, 4215 higher by 0.19% percent or Rs 8/100Kg, 0.26 percent or Rs 11/100 with an open interest of 103800, 8570 for October and November month contracts.

Poor rainfall in rainfed area and Guar seed & Guar gum prices.

As per field reports coming from Guar gum seed growing belt , Monsoon rainfall is very poor in rainfed guar growing belt. Fresh sowing of guar seed crop has been almost stopped. Biological growth of guar seed crop which was sown in first arrival of monsoon; has been stopped. Guar gum seed crop standing in rainfed area is showing the symptoms of water stress. Framers are worried about the poor condition of guar gum seed crops and low rainfall. If the subsequent rainfall doesn’t comes in next 9-10 days then there are chances that there will be damage in guar crop on large area.

As per report on “Crop with sown area” released by Joint Director Agriculture Statistics, Government of Rajasthan, till 16/08/2018; 78% sowing of Guar seed has been completed against the target decided by Agriculture department. As per this report Guar seed has been sown on 27,31,000 Hectare area in Rajasthan. If there is no rainfall, then there will be no further improvement in this figure of guar gum seed crop sowing. This year agriculture department targeted guar gum seed sowing 35,00,000 Hectare area. Last year there was sowing of Guar on 28,26,000 Hectare area during the same period. 

As per an estimate for this year farmers and traders are expecting that if the climatic conditions remain same as on till date then there will be production of 50,00,000 bags of guar gum seed maximum. Currently there are no chances in improvement of climatic conditions. Guar gum seed cultivation districts are facing the rainfall deficit.

In repeating guar growing belt ; attack of bacterial blight has been observed. Belt of Churu, Hanumangarh and Bikaner are affected with bacterial blight in guar gm seed crop, as farmers are repeating the Guar gum seed crop on same land. Generally, these types of problem are observed if farmers are not following proper crop rotation or proper seed treatment before guar gum seed sowing.

As per field report guar gum seed will give good return on current rates and guar gum seed prices may will touch Rs 5000/100Kg. If climatic conditions worsen further, then prices may go above 5000 and more. As per export data export of guar gum is higher then previous year till date. If the demand of guar gum rise with increasing crude oil prices. Then Guar seed prices will boost in local market. 

Both Guar seed and Guar gum prices are strong in the local physical markets. Market prices of Guar seed and Guar gum are quoted higher than Commodity exchange NCDEX. Forward tarding trading of Guar seed and Guar gum is also expected to remain high with buying demand and poor rainfall in cultivation period. Good quality of guar seed is traded at Rs 4600/100Kg and average quality guar seed is traded at Rs 4500/100 Kg. Standard quality guar gum is traded at Rs 9900/100 kg. In interior location, guar seed is traded up to 4300/100 Kg. guar seed is being traded strongly in the future market. At NCDEX (National Commodity & Derivatives Exchange Ltd) guar seed-10MT is traded at Rs 4610, 4641 higher by 3.17 percent or INR 141/100 Kg, 3.1 percent or INR 139.5/100 Kg with open interest of 111620, 7890 for October and November month contracts.

Guar gum is also traded strong in the future market. At NCDEX (National Commodity & Derivatives Exchange Ltd) Guar gum- 5MT is traded at Rs 9930, 9998 higher by 3.2% percent or Rs 308/100Kg, 3.99 percent or Rs 384/100, 2.47 percent or Rs 247/100 with an open interest of 63660, 3050, 20 for October, November and December month contracts.

65% Guar seed sowing has completed as per targeted area in Rajasthan.

As per latest statistics released by Agriculture Department, Rajasthan, 65% sowing of Guar seed has completed till 24th July 2018 against target decided by Govt. This year govt targeted Guar cultivation on 35,00,000 Hectare area. Till 24thJuly,2018 Guar seed sowing has been completed on 22,92,000 Hectare area.

As per reports Guar sowing in irrigated area has been completed. Farmers will not go for late sowing as guar crop will be not mature on time and Rabi crop will be delayed. There can be some fresh guar crop sowing in the rainfed area after rainfall. As per the report, it is observed that rainfall is not regular in the rainfed area where Guar was grown in an early stage. The growth of guar plant is not good due to uneven rainfall. Currently, there are no forward contracts on NCDEX for next two months. Next delivery contract is for October month.

It is last time of guar seed-sowing season. There will be many up and down in the cultivation period. The guar seed and guar gum prices will keep fluctuating with the climatic and weather conditions. Due to higher MSP of Kharif Pules, Soybean and Bajra, farmers are showing the lesser interest in Guar sowing. Farmers belong to only traditional Guar growing region are going for guar sowing. There is no interest of farmers in Guar crop sowing from the new area in irrigated regions. It is expected that sowing of Gaur will remain lower than in previous years. If the prices remain low at this time then it will be good for rest of year as farmers will show lesser interest in guar sowing. 

Guar Churi and Guar Korma are still giving very good support to Guar prices at the lower side. If the sowing of Guar remains around 30,00,000 Hectares, then it will give the boost to guar prices. If it crosses the targets of 35,00,000 Hectares, then it will be an indication of the increase in guar supply after harvesting.

Why does guar industry need an urgent Govt intervention ?

Guar crop is an opportunity for India. India is not able to explore full potential of Guar.  We will have to find answers of two simple questions: Why we are exporting Guar Gum powder at Rs 80 / Kg? second Why are we importing Guar Gum powder at Rs 500-1200/Kg? Why this difference of Rs 400/Kg - Rs 1100 / Kg is increasing our foreign exchange burden and trade deficit? India produce more than 85 % of world Guar what are those factors which are forcing us to import Guar at 5 -15 time of our export price? 

Guar sowing period is going on. Farmers are sowing Guar it in expectation of Rs 5000 / Kg. Guar need investment in R& D it can be private or it can be govt investment. If Indian Guar Gum industry make some contributory investment then it will give benefit to whole industry. It is an industry of 9000 crore to 10000 crore annuals. If 1% investment goes in R& then industry then within 5-6 years this industry can go up to 50,000 crore annuals. If Govt take this initiative then Govt can earn five-time foreign exchange of what India is getting right now.  Govt has put guar gum under 5 % tax category of GST.  At list 1 % (20 % of collected tax) needs to be returned back to this industry as Govt investment. 

Global chemical players are making huge margin from Indian Guar. Major demand is driven from Oil & Natural gas industry. secondary demand is coming from food & pharma industry. A small intervention can lead Indian Guar industry to new height. Four years before this Industry has given Foreign exchange of Rs 20,000 crore.

Collective post-harvest management and online trading platform can give a long term sustainable growth to this industry. Most of investment in India Guar gum industry is private/individual. Institutional investment and R&D can lead this industry toward new height. There is full potential of growth. Major portion of Guar seed production is going in Cattle feed Industry due to heavy protein content in Guar seed. There is 70-75 % recovery of Guar Churi Korma from Guar seed to Guar gum processing. Agronomically there is requirement of high yielding varieties. Average Guar seed production in Guar growing belt is 5-6 Quintal per hectare. There is good potential to take this production up to 10-12 Quintal per hectare. 

Guar seed cultivation area will replaced by other crops and it will shrink drastically

This year Guar cultivation area is shrinking drastically. Farmers are avoiding Guar crop after two year long downfall in guar seed. Farmers are more focused on other kharif crops than guar crop. In  rain fed area of Rajasthan farmers are preferring Moong and Moth. In irrigated area of Gnaganagar and Hanumangarh there is no irrigation and no primary rainfall. Farmer may consider Guar as prospective crop but it will be under rain fed conditions. In Haryana Farmers are replacing guar gum crop with lentil, Maize and Bajara crop.

Guar gum seed  cultivation area will go down in rain fed area.

In some rain fed area there was pre monsoon rainfall and farmers have sown Moong Moth and Bajara crop. In one 50 km long patch from Rajgarh to Jhunjhanun  there is more than 80 % sowing under Moong crop. In some patches there is Bajra crop cultivation. There was hardly any farm which is under guar crop cultivation.

While discussing with a small trader located at Haryana Rajasthan border. He said that farmers are not touching guar crop just because of  low rate of guar. Mostly farmers are putting Moong seeds Few farmers are going for Bajara Crop and hardly there is any farmer who is going to Guar crop cultivation. Local market may face a lot of scarcity of  guar seed.  Though major cultivation of Guar crop start in July as it is sown as late crop. But if major cultivation area will filled by other crop then Guar will not find space for cultivation.

Remaining farmer will also make mood same as other neighboring farmers. Arrival of Guar will dropped up to 80% in Rainfed area. As per current area Guar will share more than 10% of total cultivation area in Rainfed area. Share of Rajasthan in Guar production will increase up to 90% but total production from Rajasthan will drop down.

In Haryana Guar cultivation area us replaced by Bajara, Maize and Lentil.

Farmers in Haryana are not preferring Guar crop they are replacing Guar cultivation area with Bajara, Maiz and Lentil. Water was available in farms timely and most of cultivation is coming under these crop in Guar cultivation area. Now there is minimum chances of changes  in trends. Share of Haryana in guar cultivation area will drop up to 2-3 %. Generally Harayana is considered as supplier of best quality guar gum splits. Guar gum split and guar gum powder Industries located in Haryana will be depend on Rajasthan guar production. It can be also increase in raw material cost of industries located in Haryana. Guar gum split and Guar gum powder  industries located in Siwani will not affected but industries located in Bhiwani, Hisar and Adampur will face some supply problem.

Punjab will have very low Guar production area

In recent year Guar was cultivated in Punjab. But farmers are saying good bye to Guar. Most of guar gum seed cultivation area is replaced by the Rice / paddy crop some area has gone under Lentil and Maize. Share of Punjab in Guar cultivation area will drop down to 1-2%.

Gujarat Guar cultivation area will drop

In Gujarat farmer will also replace guar crop with other Kahrif crop like Cotton, Bajara and Groundnut. Share of Gujarat in Guar cultivation area will drop up to 7-8%. Farmers have totally demoralized with Guar seed rate in local market.

Current situation of guar seed and guar gum

Industries are purchasing Guar seed regularly.  Most of Guar split mills which are more than 4-5 years old are running in full capacity. Farmers are regularly carrying guar to mills.  Industries are processing it and selling Guar Churi, Guar Korma at higher rate. Some new industries like Guar Korma roasting, grading, cleaning and shorting has come in existence and they are using latest technology for shorting and roasting. There is full fledged export demand of guar korma and Guar churi. Guar korm is exported regularly with good demand.

There is regular demand of Guar seed in market at current rate. These industries don't want that Guar seed rate should go up. At current situation there is low demand of Guar gum.  If the rate of guar seed goes up then it will hard for them to get margin. There is also some market news that local companies have purchased the Guar Gum from market. In last week there have been  buying 3000 MT guar gum split in local market. This is a export oriented buying.

Crude oil is fluctuating and it is not maintaining the level above 50 USD. 50 USD/ barrel  is psychological level for Guar seed rate growth. Crude oil will come out from the fluctuation and it wil give support to Guar gum and guar seed prices.   

Future movement of Guar seed and Guar Gum. 

Guar seed prices will remain under pressure in next month. Once the sowing will complete then  Guar seed prices will take upward movement. Crude oil prices will be major factor which will impact  Guar seed prices.  Prices of other cattle feed production Khali, Maize, Bajara, Chapad will also give a boost of guar prices. Major factor will be prices of Soya protein.  Guar korma is used as replacement of  Soya protein. 

Fundamentally guar is very strong production side there will be unexpected down fall in quantity and quality both.  If the quality is not good then  more guar seed will require to produce the same quality of Guar gum split. Long term positions can be made  at list for  three - four months. Next year in January and February the picture will be very different.  If people go for one year positions  then there is certainly multi fold returns whether in this year or in next year. 

Up to 15th July or July contract there will be some sluggish movement but after it Guar investor will be at safe position.

Guar Korma the real profit maker or solid base of Guar seed and Guar Gum Industry

Though the markets were closed yesterday, but traders/ processor/ agent were trading & negotiating Guar Korma at Rs 2500 /100 Kg and Guar Churi at Rs 2100/100Kg. This is highest rate for Guar Korma ever traded. In this lean period of guar gum rate, Guar korma /churi has emerged as major support for Guar industry. Demand of animal feed protein is increasing day by day. The situation will remain same in coming next two three month up to next availability of green fodder in Rainy season. If we calculate the cost of raw material for Guar Korma then the margin in around nothing. Guar industry has become self sustain industry even at lowest price of Guar Gum due to support from Guar Korma prices.

At cattle farm with 2000 Cattle

Guar gum prices has adversely affected with the falling crude price. Entire guar seed & guar gum industry has come under pressure of low crude oil prices in international market. Oil prices are recovering slowly and slowly. But it will have to come out from the level of USD 70-75/ barrel to give actual support to Guar Gum Industry. After this level fracking activities will reactivate globally and new activities of oil exploration will start.

Diversification of guar product use is very important for long term sustainability. Animal feed protein is best industry which can given long term sustainability to guar seed and guar gum industry. Guar Korma and Guar Churi is the major of protein which is used in cattle feed and other animal / bird feed. There is up 50-52 % protein in Guar Korma. Still it is a competitive source of protein.

Global feed demand is increasing. Production of food is adversely affected with political crises in the world. If there is minor upward movement in guar gum demand then guar seed prices may cross the level of Rs 5000/ 100 Kg. Technically guar seed rate must be at Rs 3400/ 100 Kg but physically guar seed is available at Rs 3000 /100 Kg in local market. In Coming one month Guar seed prices will settle toward this correction level. Guar Gum exporters is improving slowly and slowly.  Guar gum exporters  or supplier are getting contract of guar gum at Rs 5400/100 Kg. 

Guar Korma is by-product of Guar gum split processing industry. There is around 70% recovery of Guar protein from guar seed while processing to guar gum processing including Guar Korma and Guar Churi.

Guar Korma the emerging base of Guar Gum Industry.

In this worst performance of guar gum, guar korma is emerged as main leverage for the guar industry. Low global demand, excess production and low prices of crude oil and natural gas is putting a negative impact on guar gum prices. Industry is getting strong support from Guar korma. 

Three year before when prices of Guar seed were Rs 27,000/100 Kg and guar gum at Rs 90,000/100 Kg at that time rate of guar Korma was only Rs 5/Kg. Now it is totally different , guar seed is at Rs 3700/100 Kg and Guar Gum is at Rs  7800/ 100 Kg and guar Korma is at Rs 2600/ 100 Kg. 

There are two possible reason. Protein content in Raw Guar Korma is up to 45 % which can be increased up to 56% -58 % by cleaning and roasting of Raw Guar Korma. At the another side Soya oil Cake is major competitor of Guar Korma with maximum 45 % protein.

Cattle feed industry prefer Guar Korma over Soya protein. Guar Korma is more digestive in nature and it is cheaper  than Soya. Demand of Guar Korma is very high from the cattle feed industry.

At another side there is low demand of guar gum so processing of guar seed is almost closed, that's why supply of the Guar Korma is very low and demand is high. 

There is huge potential of Guar korma from cattle feed industry. In coming two three year it is not impossible if Guar korma reaches at 5000-5500. Market of Guar Korma is very sound and is growing Day by day. Cattle feed industry will now downfall like oil and natural industry. Demand of cattle feed will increase day by day. 

Guar Seed &Guar Gum may become hot commodity, If demand rises from other than Oil &Natural Gas industry

During this week Guar Guar gum seed and Guar gum prices are improving slowly and slowly in future market as well as in spot market. If we analyse the entire factors we will find that things are not in favor of prices rise. First time in history there are crude oil inventory crises in USA. There is over production of crude in USA. This over production is continuing means there is not storage available for new production. In coming future crude prices may crash to a new lower level of this year. Demand of new guar is not so hot. Existing contract may keep going but there are lesser chances of further demand rise. 

At Supply side there is sufficient production and there can be a carry forward of 15’000’000 Qt Guar seed (15 Million bags) for year 2015-2016 from year 2014-2015. In worst case scenario there is sufficient stock of guar seed to cover the demand of guar gum domestically and internationally. As per early data released by Govt we find that there will be good monsoon during this year. Cotton is parallel crop of guar, which is also not preforming well. 

During this year farmer will prefer Guar over cotton especially in irrigated area. International rating agencies are giving prediction of improvement in Indian economy. It will lead to Rupee strengthen against USD. If INR will strengthen then there will be low Rupees inflow.

Mature guar crop ready for harvest in Farm in Rajasthan 

There is hope from domestic consumption. At lower price, application of guar gum may increase in other industries. At low price Guar gum will be affordable for other industries. If total share of other industries  increase up 50 %, than oil and natural gas industry, then guar guar may become a hot commodity for long term basis. Guar meal and Guar Korma will also give a strong support to guar seed prices. Currently guar Korma and Guar Churi is preforming very well in comparison to last years and guar gum. Churi Korma will always work as base line for Guar seed price.

Will Guar and Guar gum rate stable?? How will it affect Guar Gum Seed Cultivation in india ??

Guar seed and gaur gum rates has improved by Rs 50 and Rs 100 in local market after improvement in position in future market. At lower level supply of seed has slow down in local market. Some stockists are also showing interest in purchasing guar seed and guar gum to lower down their average cost of stock. 

They are covering or minimizing their inventory loss. In market of Jodhpur guar is available at Rs 3800 and Gum is available at 9050.

But the fear of further crush is still with guar seed and guar gum, as crude Oil is being traded below 70 USD. Once Crude will cross USD 70 then it will give a platform to Guar at demand side. Though, current improvement is a sentimental trend but it will be keep going if the rally in crude will keep going.

Will Guar and Guar gum rate stable??  How will it affect Guar Gum Seed Cultivation in India ??

The trend of down fall in rate has been halted right now. Stack holders in physical market are in the position of wait and watch. In a discussion with local trader it was found that there is no any major impact on business. Even at improved rate, physical volume has not increased.

For short term guar is stable and there are low chances for further crush but for long term market will have to wait for crude price go beyond 80 USD.  In current international politics there is no good news for economic growth.  Major concern is coming from increasing political instability in Europe.

In coming time guar gum cultivation in India will not effect, because cotton is parallel crop to Guar in Guar Growing belt. This year there is no any major improvement in cotton. Cotton is also going down. Guar gum export is also going down.