The newly launched guar seed contract on the Multi Commodity Exchange (MCX) is attracting huge volumes these days as the specter of drought of large parts of northern India threatens to clip the crop?s output.
The daily trading volume of MCX guar seed contract crossed Rs 100 crore as many as three times last week because of heightened trader participation. MCX re-launched the guar seed contract for the third time on July 27th. The contract turnover reached close to Rs 50 crore on day of its launch, after which the turnover crossed Rs 107 crore on August 7th. Monday, the daily turnover of the newly launched contract was Rs 85.68 crore.
Traders attribute the greater participation to expectation of lower yield this year due to deficient rainfall in most of parts of guar growing areas.
?If it does not rain over the next two weeks per hectare yield of guar crop would come down significantly,? said Kanjibhai, a trader from Bikaner. Due to uncertainty over production, guar prices have been rising in the last two months.
Monday, CX September contract was quoted at Rs 2,360 per quintal against the spot price of Rs 2,250 per quintal. ?The prices would definitely go up by another Rs 200 per quintal during next few weeks,? Pukhraj, another trader said.
Guar seed is mainly produced in Barmer, Bikaner, Sikar and Churu districts of Rajasthan and also in some parts of Haryana and Punjab.