Today's Guar Seed and Guar Gum Price: What's Driving the Movement in the Physical and Commodities Markets?

Guar seed and guar gum prices are on the move today, with the physical market and commodities market both seeing significant changes. Here's what's driving the movement and what it means for investors.

Guar seed and guar gum are two important commodities that are used in a variety of industrial applications. Guar seed is the source of guar gum, which is a thickener, stabilizer, and suspending agent. Guar gum is used in a wide range of products, including food, beverages, cosmetics, and pharmaceuticals.

Guar seed and guar gum prices have been on the move in recent months, with the physical market and commodities market both seeing significant changes. In the physical market, guar seed prices have risen by over 20% since the beginning of the year. Guar gum prices have also risen, but to a lesser extent.

What's Driving the Movement in the Physical and Commodities Markets?

There are a number of factors that are driving the movement in the physical and commodities markets for guar seed and guar gum. These include:

Increased demand from China and India: China and India are the two largest consumers of guar seed and guar gum in the world. Increased demand from these countries is driving up prices in the physical market.

Reduced supply: The supply of guar seed and guar gum has been reduced in recent months due to a number of factors, including drought in India and Pakistan. This has also contributed to the rise in prices.

Speculative trading: Speculative trading is also playing a role in the rise in guar seed and guar gum prices. Speculators are buying guar seed and guar gum in the hope that prices will continue to rise.

Today's Guar Seed and Guar Gum Price: What's Driving the Movement in the Physical and Commodities Markets?

What Does It Mean for Investors?

The rise in guar seed and guar gum prices is good news for investors who are invested in the guar gum industry. However, it is important to note that prices could also fall if demand or supply conditions change.

Investors who are considering investing in guar seed and guar gum should carefully consider the risks and rewards before making a decision. They should also do their research to understand the factors that are driving the market.

Here are some additional factors that could affect guar seed and guar gum prices in the future:

Weather conditions: Weather conditions in India and Pakistan, where most of the world's guar seed and guar gum is grown, can have a significant impact on prices. Droughts or floods can reduce yields and lead to higher prices.

Government policies: Government policies in India and Pakistan can also affect guar seed and guar gum prices. For example, if the government imposes export restrictions, it could lead to higher prices.

New uses for guar seed and guar gum: The development of new uses for guar seed and guar gum could also lead to higher prices. For example, guar gum is being used as a substitute for some plastics, which could increase demand and drive up prices.

Guar seed and guar gum prices are likely to remain volatile in the near future. However, the long-term outlook for the market is positive, as demand for these commodities is expected to grow. Investors who are considering investing in guar seed and guar gum should carefully consider the risks and rewards before making a decision.

As on last trading day, 14th July,2023, NCDEX guar seed price was INR 5596/Quintal, INR 5688/Quintal, INR 5799/Quintal, for 20th July 2023, 18th August and 20th September 2023 Contract. NCDEX spot price was INR 5631/Quintal. NCDEX guar gum price was INR 11,240/Quintal, INR 11,423/Quintal, INR 11,661/Quintal, for 20th July 2023, 18th August 2023 and 20th September 2023 Contract. NCDEX spot price is INR 11309/Quintal. In local physical markets (Mandi) average guar seed prices are INR 5,500/Quintal and average guar gum prices are INR 11,000/Quintal.

Why Guar seed and Guar Gum is going up ? Is it real or speculative ?

Guar and guar gum both are becoming highly speculative in nature. Every week there is different picture , In one week it is goes up in next week it slide down. Either it reflects as top looser or it reflects as top gainer in commodity exchange. IS it real or speculative. Commodity should follow same trend at list for one month  specially in international market, because it take minimum two month in contract negotiation and delivery.

It is questionable that why this trend  of speculation is keep going in forward market. NCDEX is only market where Guar Seed is traded, so it is very easy for speculators to manipulate the market trend.

Following factors gives a clear indication of price fall for guar seed and Guar gum. up to last month it was moving down side but from last month it is moving upside with regular speculation.

Why Guar seed and Guar Gum is going up ? Is it real or speculative ?

Bumper Production

As per existing data available and released by different state govt there was production of more than 3.4 Million MT Guar Seed production. It is 1.4 million more than the one year demand. Last year demand of guar seed was 1.8 Million MT that is be some where equal to 2 Million MT.

Carry Forward Stock of Last years

As per last year demand and supply data there was  carry forward stock of 0.8 Million MT. Before last year, production of guar seed was also bumper. if we add this carry forward stock to last year production then Huge stock of guar is available in market. This is the reason that Guar seed prices are continuously falling since new harvest arrival started in market.

Demand of Guar 

The demand from Oil and Natuarl Gas Industry is low this year. Figure of guar gum demand  should be lower than last year. As per analysis demand of Guar seed for this year should be around 1.5- 1.7 Million MT, so this year , there is  1.7 Million MT Over production as per demand.

guar seed and guar gum seed.

Low crude Prices 

Most of Guar gum  is used in Oil and Natural Gas industry for hydraulic fracturing process as Guar Gum Powder. Due to over supply of oil in market prices of crude is its lower level. For a stable guar seed and Guar Gum prices, prices of crude oil should be more than 80 USD/ Barrel. But it is far below than this figure. Guar is a demand driven product. In this over production condition there is no chances of supply driven movement.

Warehousing in USA

Many Indian companies has stocked there production in US for ready to sell and cash and carry concept. This activity is back biting the industry.  Industry has loose the long term contracts buyer gives order as per their current demand. There is hyper competition and low margin. Fragmented demand cant be stable factor for the price rise. 

Processing Unit in India

Some foreign partner has developed the processing facility in India so it is not easy to identify the new demand so early that it can give immediate effect to market prices.

IF we analyse the above factors and try to correlate the demand and supply then rate of guar seed should be in the price brackets of INR 3000-4000 / 100 Kg. But it is being traded more than 5000 with regular speculation. Investors are advised keep away from this game of speculation.