Guar seed spot and futures prices are likely to remain weak in the short term, due to rainfall activity across guar seed cultivating areas.
Reports show that most of Rajasthan and Gujarat have been covered with clouds and rainfall has been reported in some parts of these two states. This rainfall was very beneficial for delayed sowing activities.
Guar seed spot prices in Jodhpur fell by nearly 8% at Rs 1,872 per quintal on Monday over the last week, on continued profit, taking in the anticipation of rains over Rajasthan and other neighbouring states. On the NCDEX platform, guarseed September contracts were down 8.4% to trade at Rs 1,947 per quintal on Monday over the last week. Guar seed spot prices in Jodhpur remained under pressure and registered a sharp fall of Rs 150-180 a quintal, as uncertainty over farm futures, along with positive rain forecast by the Met department added to the bearish sentiment, an analyst with Angel Broking said.
Appreciation in the rupee is also one of the major factors for the drastic fall in the last week, which might also support the fall in the coming week. The rupee appreciated by Re 1 a dollar in the last 5-6 days. This may once again keep the exporters sidelined, as it would eat their margins, sources said.
“The overall trend in guarseed in the short as well as medium term would depend on the rainfall. Also, we have to keep a close watch on the movement of the rupee, as it will impact exports from the country,” analyst said.
Stocks at NCDEX warehouses have increased to 72,607 tonne (including guar gum) as stockists are selling in futures trade, sources said.