Guar seed/ guar gum is in upward trend

August month is very positive for guar seed. It has crossed the level of 4000. 4000 is major psychological level. Prices will remain around 4000 in next week. There will be some selling pressure in physical market. Investors who have purchased guar at level 2900-3000 will try to move out from guar contract at 4000 level with 30 % return. Level of of 4000 is a decision-making point for investors. We will see a regular up and down between 4000-4500 level.

Once Guar will cross the level 4500 then buying will start in it. As per fundamental reports guar crop is not good in many areas. It is damaged in flood. It is facing drought in major guar cultivation belt. Crude oil is also stable above USD 50/Barrel. OPEC has cut down  production to control the prices. Supply of oil is also tight in USA. Recovery has noticed in oil prices. As per industry report oil and natural industry is again showing interest in guar gum instead of other artificial replacement.

Mostly future market trading governs Guar trade. Current contract in future market will come in realization in mid of October. There is time of two months in realization of contract. At this time investors will be not in hurry in exit. Once prices will stable above 4000 for 5-6 days then strong buying will be noticed and prices will start move toward 4500/100 Kg.

Guar gum has crossed the level of 8400. With recovery in export demand guar gum is moving toward the level of INR 9000/100 Kg. Sowing of Guar seed has almost completed. Final figures of sowing will be come out by the end of August month. Speculators are active in market. Speculators are ultimate risk taker in market. As per market information upward trend will be continue. There is demand in physical market and arrival of guar is very poor in rainy season. Supply will be remain tight with increasing prices.

Pre-monsoon rainfall and future of Guar seed / guar gum

This year guar remained a low-profile commodity. Trading of new crop was started at 3300 and it could not cross 4000 level. Currently it is being traded at Rs 3750. It remained a loss-making business for stockist and traders; as cost of storage, interest on capital and moisture loss were in addition on buying cost. Crude prices in international market was major factor which kept pressure on guar prices in addition existing stock and low demand of guar gum in comparison to last year were another factor which kept prices of Guar moving around 3500.

After all pressure guar didn’t below 3000.Prices of Churi Korma were also profit making venture. International demand is mainly derived from USA, China, Germany and Russia.  It is expected that this year guar cultivation area is going to shrink. IN irrigated area Cotton is major replacement and Pulses will be major replacement in rainfed area. 

Current pre-monsoon rainfall is covering entire Guar growing belt of Rajasthan from Hanumanagarh, Bikaner to Jodhpur and Jalore. Prices will come keep moving toward 3000 with this pattern of rainfall. Early sowing is considered is Good in rainfed area and in Irrigated cotton cultivation will increase as farmers will able to do sowing of cotton in more area with same water. Initial fundamentals are not positive for Guar seed and Guar gum.

Prices will keep moving with subsequent rainfall pattern. Any uneven rainfall weather it is low or high will give boost to Guar prices. Both conditions are agronomically bad for guar cultivation. Rainfall is not only fundamental to decide Guar prices. International political coincidences will also put indirect impact on Guar. Crude output and Crude prices will major fundamental factor which will put impact on Guar prices. Guar prices will adjust steps with international demand or export of guar gum figure. 

Cultivation area of Guar will be major factor which will decide movement of guar for next 12 months. Guar cultivation area and guar prices will run on different tracks. Increasing Cultivation area will lead to decrease in Guar prices. Current contract of Guar in commodity market will carry on up to July and new contract will start in October. Let see whether Guar will shine like Gold or it will remain a Gallow of farmers and traders.