Guar seed futures prices on the National Commodity & Derivative Exchange Ltd (NCDEX) on Tuesday hit lower circuits on reports of good crop prospects in Rajasthan and Haryana.
Guar seed September 2008 contracts breached Rs 1,700-level mainly on short coverings amid some offerings. The September 2008 contracts declined by 3% settled at Rs 1,681 per quintal on reports of clear weather across Rajasthan and Haryana that will now benefit the standing crop. Initial estimate suggests that Guarseed output may exceed 100 crore bags in this year.
?There is short covering in the market as the crop reports are good. Additional area in the state may come under guar seed,? a Jodhpur based trader said. However, prices were on declines in the past one week on reports that continuation of dry weather in western parts of Rajasthan may affect the recent sown crop.
?Guarseed prices are likely to trade sideways with positive bias on continued short covering, however, some fresh selling may emerge at higher levels due to higher crop estimates,? an analyst with Karvy Comtrade said. The September contract had fallen more than 19% after hitting a new high of Rs 2,172 per quintal on July 22.
?There are some scattered enquiries from overseas markets as rupee has depreciated but there are no reports of bulk orders for guargum because our prices are marginally higher than Pakistan,? a leading trader said. Trader expects the demand for guargum to improve due to depreciation of rupee and the expectation of fresh demand from China, after the Olympic games.