Guar seed and Guar gum prices will remain strong with strong buying

During last week there was upward price movement in guar and guar gum prices due to poor arrival of guar seed in market. Stockist and processing industries are regularly buying the new arrival of guar crop in large quantity. There is news that guar crop has damaged due to heavy rainfall in irrigated areas and it has also damaged in rainfed area due to poor rainfall. There are initial predictions that arrival of guar crop will be remain tight. As per market men arrival will not improve in next 2-3 weeks due to poor arrival during Diwali festival period. There is Diwali on 7th November, a major festival in India. Upward prices movement in guar gum seed was noticed yesterday after the opening of business in future market for the current week. Price of guar is quoted high in local physical markets or grain mandi. Trade of guar seed in local market is being done at higher prices. There was no impact of down ward price movement in guar at commodity exchange on last trading day of last week. Trading of guar in physical market was unaffected with downward price movement.

Prices of guar gum is also strong with guar seed. Guar gum prices are showing upward price movement with increase in number of oil rigs in USA and increase in crude oil production. There was significant upward price movement in prices of guar gum during last week. Prices of Guar gum will also remain positive in this week. If the processors get good prices of Guar meal /Churi / Korma then prices of guar gum may be quoted low. Export data of last month has not been released by govt till now.

Guar seed and Guar gum prices will remain strong with strong buying 

Prices of guar seed and guar gum will remain strong in this week. Farmers will carry their produce in market slowly and slowly, stockist and processors will continue to buy their produce. Prices of guar are strong and keep increasing even with arrival of new guar crop with poor quality, black seed and more moisture. Keep the position strong in physical stock. Arrival of guar seed will be poor in Jodhpur region due to damage in rainfed guar crop. Prices of Guar will remain above Rs 4500 /100Kg. Guar is being traded at higher prices in commodity or future market for next month’s contracts than the current month contract. Farmers should avoid carrying their complete produce in market in one lot. If the arrival will increase then it would put pressure on guar seed and guar gum prices.

Demand of guar gum will increase, with increased crude oil production.

As per the Backer Hudges 4 new oil rigs of crude oil production has added in this month in USA. Currently 1067 oil rigs are functional in USA which are 154 higher than previous year. This is good news for Indian guar gum industry. Consumption of crude oil in Chinese oil refinery is increasing. Consumption of guar gum will also increase with new fracking activities.

Arrival of guar gum is increasing in local markets. Stockist are buying guar in bulk. By the end of this month good arrival of guar will start from rainfed area. Speed of arrival of guar from rainfed area will be limited as farmers of rainfed area can hold guar for longer time in comparison to farmers of irrigated area. After the harvesting farmers from irrigated area clear their old credit and buy the farm input for new crop, so they can’t hold the guar crop for longer time. Colour of guar seed has turned black in irrigated area due to rainfall in last period of crop maturity.

If the prices of guar remain good at arrival of guar crop in market then it will boost the guar seed and guar gum prices during rest of year. Export of Indian guar churi korma can increase to China because import of soya protein in China has decreased from USA due to some trade dispute. If export of Indian guar churi korma increases, then guar prices will get good support in local markets. 

Prices of guar gum is also good with prices of guar seed. Guar gum is an export demand driven agriculture commodity. Guar is consumed in local markets, but guar gum is consumed in international markets. If arrival of guar seed remains tight in local market, then prices of guar seed will reach near to Rs 5000/100Kg around Diwali.

Guar is fading its shine ?

Guar remained a low-profile commodity till 2012. It is an industrial crop. There is wide range of application of guar gum powder. Guar is a highest number of industrial application in all agriculture commodities. It is used in food, food processing, textile, paper, printing, mining, oil natural gas industry, cement, pet feed, fish fee, cattle feed, cosmetics, detergent, toiletry, medicinal, pharmaceutical, and much more. After the boom in 2012 it drew global attention and very soon it became a most highlighted agriculture commodity. India is largest supplier of Guar in world. It is cultivated in low fertile, lower water availability and stress climatic conditions.

Farmers of desert of THAR started to see guar as a ray hope. Guar gum processing emerged as an important industry in Guar growing belt. Prices of guar is under pressure of supply since last 4 Year and now farmers are losing the hope. This year everyone is in loss farmers got good return from other pulses crop. Stockist invested the money but prices are going down and down regularly. Interest on investment is giving another wound. Storage loss is worry for farmers and stockist, Guar processing industries are shutting down. Guar is not preforming well in commodity exchange. 

This year cultivation area was low and new production of guar is also low. Farmers have already started to reject Guar crop and cultivation area has shrink 40-50% in irrigated belt. Now stockist are coming out from guar stock, due to continuous negative return. Old stock of Guar is coming in market and it is putting supply pressure. Investors are clearing their stock and entering in other commodities. Guar processing industry are now making profitable return on investment they are recovering tehri expenses from the Churi Korma sale. Viability of guar processing is coming from Churi Korma. Churi Korma is getting tough competition from Soybean de-oiled cake. Soybean prices are low and DOC is available at low prices.

Next 4-5 months are very critical for Guar if prices remain low then cultivation area will shrink. Next year production will further go down. Heavy rain and Low rain both conditions are bad for guar. If climatic conditions remain extreme, then Guar production will further down. Prices of guar are at lowest level. At this level, there are minimum chances of further drop down in guar prices due to strong support of Churi Korma. Generally, supply of guar comes down by the end of December, but this year supply of guar is not coming down due to exit of investors from Guar and old stock is coming in market.  If all the conditions remain positive, then guar may touch 4000 level at upper side. 

Guar is an important agriculture commodity, mismatch in demand and supply has lead it negative growth. Guar cultivation area will shrink further if the demand of guar will rise. Export data of guar gum for this financial will decide the further movement in guar. Demand will remain low in next two month as new contract of guar supply will be signed in next financial year.