Guar seed futures on the Multi Commodity Exchange is expected to rise by atleast 4-5% in the coming weeks to reach around Rs 2,450 per quintal over fears of a 30%-40% drop in output in main growing regions of the country. At present, guar seed October futures on MCX is quoting at around Rs 2,348 per quintal. Analysts believe that prices might move further up in November if demand recovers after Diwali.
?We see Guar seed prices soaring to Rs 2,450 in the coming few weeks. It currently is at Rs 2,348 per quintal and if it technically sustains the Rs 2,360 a quintal pricing then the future for guar seed is strong,? said Tarun Satsangi, of Bonanza Commodity.
Pace of arrivals is also slow due to lower acreage coupled with scanty rains. This has led to a drastic fall in the production of Guar seed in the year 2009-10 (Oct- Sep) crop season.
India is the main producer of guar in the world, with Rajasthan and Haryana being the main producers which produce around 70% to 80% of the total crop. The crop is also produced in Gujarat, Punjab , Uttar Pradesh and Madhya Pradesh.
Sowing for guar is done at the onset of monsoon during June-August and harvesting is done between Sept-Nov.
Although monsoon has gathered momentum in the last few weeks but the guar crop has already been damaged due to late arrival of rain this year.
Average daily arrival of guar has dropped to 400-500 bags per day as compared to 2,000-2,500 bags during the same period last year.
Fresh arrivals of early sown guar seed has started in some parts but in small quantity due to lower output at around 400 bags compared to 2500 bags during the same period last year.
Last year Guar Seed production stood at around 90 lakh bags and the stock for the new season (October -November) is around 40-45 lakh bags.
?Export demand is also picking up. This year, guar seed has seen around 9.74% drop in its cultivable acreage. This year guar seed cultivation acreage stands at 2.5 million hectare,? said Satsangi.
Guar seed futures prices softened by 1.39% on Thursday as traders preferred to reduce their positions largely due to weak trend in spot markets on increased supply.
Apart from subdued trend in markets, strengthening of rupee against dollar also helped commodities, including guar seed prices to decline at futures market.
Guar seed price for far month January fell sharply by 1.39% to Rs 2,404 per quintal, in an open interest in 2,020 lots at the NCDEX. October contract also eased by 0.30% to Rs 2,290 per quintal, showing an open interest in 54,710 lots.
