Guar seed and Guar gum will remain under pressure of speculators.

Assembly election in Guar growing state “Rajasthan” has finished and result has declared. During the last election guar seed prices was an election issue in guar growing belt, specially the western Rajasthan. One reginal party could secure few seats. It was all success of Guar issue. In this assembly election guar was not a hot issue among the voters of Guar growing belt. Guar if preforming against the basic trends of commodity market. At the time of peak arrival when daily arrival was around 90,000 - 1,00,000 bags per day then guar prices was at its top. After that guar seed arrival in market came down to 30,000 bags per day and prices fall against the general law of tight supply. 

Currently arrival is around more than 30,000 per day prices are around 4300-4400. This year export statistics of gaur gum are positive, and it is higher than previous fro the same period from April- September. There was export of 2,65,195 MT of guar gum till September,2018. New data for October and November month has not released by govt. As per market man export is higher than previous year. Fracking activities are increasing in USA and south America. OPEC countries want to decrease the oil production so that crude prices can go up. But USA is increasing the shale crude oil production and putting the pressure on OPEC countries. Guar gum demand and export is increasing continuously since last three years. 

Prices of Guar seed and Guar gum in the clutch of speculators. Once the prices go around 4900, farmers and traders feel that prices will goes further than prices fell sharply with profit booking at upper level. Once the prices go down around 4000 when farmers and traders do the distress selling then strong buying is noticed at lower prices. New production/ supply of guar will come in next year in October month, price movement will depend on demand of guar seed and guar gum market. Demand is stable in local physical market, buying has noticed at every level. 4000-5000 level has emerged as major price bracket. Guar seed prices have strong support of Guar Churi and Guar Korma. Guar korma is exported and used as substitute of Soya protein. 

Next two- three months are very crucial for guar gum as oil drilling companies will import the Guar gum for drilling/ fracking operation. How much guar gum will be exported in this period that will be very important? Up to 14th December there are 1071 active rig operational in USA, this number is 141 higher than previous year for the same period. Recently Mexico has also given contracts for oil and gas drilling blocks. As per global drilling activities, demand of Guar gum will be higher than previous years.

Guar seed and Guar gum prices have stuck in whirlpool of crude oil

Dependency on oil and natural gas industry is taking the guar seed and guar gum prices in uncertainty. Though crude oil is a commodity and it is fuel for global economy, but it has emerged as geopolitics weapon. Global power are trying to prove them selves as superior to control the crude oil prices. With one decision and meeting prices of crude oil start to move ward and next day with another decision prices of crude oil starts to fall. Up and down in prices is regular trend in any business. When demand goes down or production increases then prices tends to go down. Indian Guar seed and guar gum industry is taking the downward crude prices as negative factor. In reality prices of crude oil is going down as production of crude oil is increasing in USA. Today USA is producing more than 11.7 Million barrels per day. USA economy has become net exporter of crude oil.

All this development has happened because of shale crude oil production, which uses fracking technology. Guar gum is major drilling chemical/ingredient in fracking technology. If we look at the data of guar gum export. Then we find that guar gum export is increasing. South American countries have emerged as new destination for Indian Guar gum. Indian Guar gum industry and traders should not respond immediately after guar gum price change. 

As per global rig counts data there are 144 more active rigs count then previous year in this week (08/12/18) USA. Arrival of Guar seed in market has dipped due to election, winter and marriage season. This time is last time of peak arrival after December arrival of guar gum will be fall below 10000 -15000 bags per day. Small farmers have already sold their stock after the harvesting as they don’t have holding capacity. Physical demand of gaur is still very high. 

Guar seed and Guar gum commodities are being quoted strong in local physical markets to strong buying at lower levels. Prices of Guar seed and Guar gum both are quoted strong. Future trading of Guar seed was closed strong at closing of last trading but future trading of guar gum Guar gum was weak at closing of last trading

Demand of Guar gum for oil drilling in USA is increasing

Crude Oil production in USA is increasing regularly and in the month of November Crude oil production in USA is historic all-time high. In the month of November domestic crude oil Production is 11.7 Million Barrels per Day. USA is emerged as largest oil producer of world after Russia and Saudi Arabia. Export of Crude oil from USA is less than 3% percent of global export. It si expected that USA will increase the share of its crude oil export. Its is good sign for Indian guar gum industry that crude oil production in USA is increasing and USA uses fracking technology for crude oil production. Guar gum is used in bulk quantity in hydraulic fracturing for oil drilling.

Active rig count in USA in also higher than previous year. On 21 November there was 1079 rigs in USA which were 156 more than previous year. Oil rig count isn major scale for drilling industry and its input supplier. Active rig count is an active demand indicator for product used in new drilling, completing, producing and processing of hydrocarbon. 

Export demand of Guar gum is high currently. Continuously it is increasing than previous years. Demand of Guar Churi Korma is also high in market. Export of Guar Churi Korma is also on peak. Arrival of guar in market is going down. Most of guar has been settled either with processors or stockist. Availability of guar will be very limited in coming days. USD/INR exchange rate is also coming down. Exporters have to pay more for the local procurement and processing in calculation of USD. 

Guar seed and Guar gum commodities are being traded strong on physical markets due to strong buying at lower levels. Prices of Guar seed and Guar gum both are quoted strong . Forward contracts of Guar seed and Guar gum are also strong due to buying at lower levels. Good quality of guar seed is traded at Rs 4400/100Kg and average quality guar seed is traded at Rs 4300/100 Kg. Standard quality guar gum is traded at Rs 9000/100 kg. In interior location, guar seed is traded up to 4200/100 Kg. Guar seed is being traded strong in the future market. At NCDEX (National Commodity & Derivatives Exchange Ltd) guar seed-10MT is closed at Rs 4311, 4362, 4410 higher by 1.5 percent or INR 63.5/100 Kg, 1.52 percent or INR 65.5/100, 0.96 percent or INR 42/100 with open interest of 79930, 74910, 2060 for December, January and February month contracts. 

Guar gum is being traded strong in the future market. At NCDEX (National Commodity & Derivatives Exchange Ltd) Guar gum- 5MT closed at Rs 8717, 8826, 8965 higher by 2.36 percent or Rs 201/100Kg, 2.07 percent or Rs 179/100, 1.05 percent or Rs 93/100 with an open interest of 23325, 53645, 660 for December, January and February month contracts.

Export of Guar gum from India has increased

As per the data released by the APEDA (Agricultural and Processed Food Products Export Development Authority) export of Guar gum is higher than previous year. This year export of guar gum from April,18 to Sep,18 is 2,65,195 MT. Last year for the same period, guar gum export was 2,52,868 MT. This year there is 12327 MT more guar gum export. In monetary term value of exported guar gum is INR 24,30,00,00,000 or 355 Million USD. Export value of exported guar gum is 19% higher than previous year in Indian Rupees and 12 % higher than previous year in USD.

Export of Guar gum is increasing continuously than previous years. Global crude oil production is increasing. USA has emerged as top crude oil producing country in world. Guar gum powder is used in oil well drilling for crude oil production. As per market men this year production of guar seed is lesser than previous years. Arrival of guar seed is going down in the market. By the end of December arrival of guar seed will be almost finished. Traders are buying the guar seed in market as per market price. There is no over supply of guar seed in market. Demand of Guar korma is high in market that’s why guar gum prices are lower. Prices of Guar seed and guar gum were under pressure of profit booking at upper level. November month contract for guar seed and guar gum in NCDEX was settled around 20 November. Now guar seed and Guar gum are traded for December month contract in commodity market. 

Guar seed and Guar gum commodities are being quoted weak in local markets due to trimming the positions at upper levels in forward market markets. Prices of Guar seed and Guar gum both are quoted weak. Future trading of Guar seed and Guar gum are also weak due to weak guar gum prices. Good quality of guar seed is traded at Rs 4400/100Kg and average quality guar seed is traded at Rs 4300/100 Kg. Standard quality guar gum is traded at Rs 9000/100 kg. In interior location, guar seed is traded up to 4200/100 Kg. Guar seed is being traded upward in the future market. At NCDEX (National Commodity & Derivatives Exchange Ltd) guar seed-10MT closed at Rs 4472, 4531 higher by 1.02 percent or INR 45/100 Kg, 0.87 percent or INR 39/100 with open interest of 122420, 38200 for December and January month contracts.

Guar gum is being traded in upward side in the future market. At NCDEX (National Commodity & Derivatives Exchange Ltd) Guar gum- 5MT closed at Rs 9156, 9300 higher by 1.51 percent or Rs 136/100Kg, 1.32 percent or Rs 121/100 with an open interest of 61045, 1135 for December and January month contracts.