Guar seed and guar gum price are in upward trend with strong fundamental.

This week was very strong and highly volatile for guar price and guar gum price. Guar and guar gum prices touched highest point of its last three-year trading. Complete gain in prices were washed during last two days of week due to speculations  and falling NCDEX guar guar gum price. Fundamentally guar was strong this year from supply side due to poor supply predictions. This year rainfall fall pattern was very poor. Most of guar seed production comes from rainfed agriculture, this year guar cultivation area under irrigated conditions was very low. Over all this year production of guar was estimated lower than previous years. As per market men, estimated production of guar seed for the year 2017-2018 was around 70,00,000-75,00,000 bags of 100 Kg each. Arrival was regular and there was no any major information on increase in demand of guar gum.  During the arrival of new crop in month of October, November and December, prices were stable and these were not moving upward due to peak arrival. 

But at starting of January, some data started to circulate in market, released by APEDA and other govt agency, that guar gum export has increased by 42 % during current budget year in comparison to previous year for same period of April- November. This year there was export of 3,21,570 MT of Guar gum during the last year in same period export was 2,26,431 MT.  Market got some support from these figures.

During this arrival period, crude oil prices were moving upward, somewhere this was a sign of increase in demand of guar gum in future.  Crude oil prices are another strong fundamental behind increasing guar gum prices.  A after production estimates crude oil prices works as major catalyst for guar and guar gum prices. During arrival period crude oil prices were moving upward slowly but it was not moving far away from level of US 50/barrel.  With tight geopolitics and cut down of crude oil production by OPEC countries, prices started to move upward. Guar gum prices were not getting enough support from these slow growing guar prices. 

When crude oil price started to move toward the level of USD 70/barrel in international market it started to draw attention of US administration. At the end of last week, a hot news emerged from USA that USA will open its all off shore drilling facilities. It was hot news for guar gum industry as oil and natural gas industry will require drilling chemical with new drilling facilities. Guar gum is an important drilling chemical. Stocks of oil drilling companies have improved in USA. During last one month US oil and natural gas industry is attracting investment. 

With news of opening of new offshore drilling facility Guar prices and guar prices started to move upward Guar seed touched the level of Rs 4400/100 Kg in local markets. Guar gum touched to the level of Rs 9600/100Kg. At the same time speculators became active in market under selling pressure prices of guar gum fell around Rs 500/100Kg one time it touched the level of Rs 9200/100Kg but by Friday evening it got recovery in physical market. Gar seed prices strong and stable in this pressure and it did not fell in physical market as arrival of commodity dropped in market. Guar gum prices remained down ward continuously for two days. 

There was one more factor which was giving fundamental support to guar prices; that was extreme cold wave in north glob. There is huge requirement of natural gas and heating oil to keep these country warm and working.

With strong fundamentals farmer and traders are confident for guar. Holding of guar has started in market. It is expected that in coming days arrival of guar gum will also drop in local market.  Prices of guar would get boost from poor supply. At lower side Guar Churi korma is very strong, it is being traded at Rs 2700/ 100 Kg there is regular export demand of roasted Churi korma. All fundamental are positive and not reversible at this time as new arrival of guar will come in October-2018. Up to next arrival of monsoon prices of guar will keep improving slowly and slowly don’t expect a one or two day straight peak. Generally these type of price rises are highly speculative and unstable. Framer should sell out stock slowly and slowly as per their requirement.

There is only fact which put pressure on guar, that is as future decision of OPEC to increase to crude oil production to keep the investment away from USA oil and natural gas industry.  

Guar guar gum prices slipped due to profit booking at upper level .

January is great month for guar and guar gum both. Guar / guar gum prices are moving in upward direction. After continue upward movement today guar / guar gum prices slipped from its upper level due to profit booking in forward market.  Speculators are active in market. After fall in NCDEX guar / guar gum prices there was little bit some pressure in physical market but pressure selling was not noticed in physical market. Guar is being traded at Rs 4350/100 Kg  and guar gum is being traded at Rs 9450 in Jodhpur market. There are minor variation in other markets. 

Farmers need not to worry. Commodity prices never run in one direction.  This year  over all guar and guar gum price  will move in upward. Guar prices at level of  Rs 4500/100 Kg will be very critical and can be volatile for a period. Guar prices may take 2-3 days to sustain above this level. New stock of guar  will come after  October-18 in market, up to that time market will have to adjust itself with existing stock.  NCDEX guar / guar gum prices are major source of price discovery for physical market. Single direction NCDEX guar / guar gum price movement for one week can affect physical market btut one or two days volatility NCDEX guar / guar gum prices will not affect physical market.

Crude oil prices are at its highest level after May 2015. Complete Europe and North America, Russia, China are under cold storm there is heavy demand of heating oil and natural gas. With increasing crude oil prices,  it is expected that Guar gum demand will increase in coming days. Crude oil prices has cross the level of USD 68/barrel per day. Higher crude oil prices will badly impact the US economy. US administration will balance OPEC crude oil prices with shale oil. Guar gum is used in fracking technology and fracking technology is used to explore the shale oil. Initial signals of new oil exploration have given by US administration in last week. 

At lower side there is strong support of Guar Churi Korma. In year  2012 Guar Churi Korma support was not not so good. As per situations  It looks, that year 2018 will be historic for Guar. It will be emerge as major contributor to farm export from India. At this time physical market is strong and fundamental of guar are also strong.