Guar futures prices are expected to remain higher in the short term due to a sharp decline in the acreage under guar in the major producing states, mainly Rajasthan, amid lower stocks.
Total sown area in Rajasthan till July 21 is at 10.43 lakh hectare over 14.39 lakh hectare achieved in same period last year, according to government figures.
Guarseed (Jodhpur) September prices rose nearly 10% to trade at Rs 2,154 per quintal over mid-July while guargum (Jodhpur) September contract prices also jumped 20% to trade at Rs 4,877 per quintal on Friday on continued buying.
A drastic fall in the acreage under guarseed in the crop year 2009-2010 has led to a sharp rise in the guar prices since last one month. The Rajasthan government also said that the total targeted area in the state this year is 25 lakh hectare, which is less compared to the last year?s targeted area of 31.16 lakh hectare.
?Guar seed and guar gum futures gained recently mainly on decline in the sowing area coupled with delayed sowing activities at the major guar producing areas of Rajasthan on the back of low monsoon rains which encouraged traders to build long position in anticipation of higher prices in future,? a trader said.
Heavy buying by guar gum manufacturing industries and restricted supply in the physical market also brought rise in guar seed futures, he added.
Acreage of guar seed production in Rajasthan, which accounts for around 80% of total guar seed production, is down by 74% in the current season as compared to the same time last year due to slow progress of monsoon this year.