Guar, gum mart volatile on supply estimates

A rare volatility is seen in the guar seed and gum market. The spot seed prices, which were at Rs 1,441.65 a kg on July 1, increased to Rs 2,040.40 on September 1. But they came down to Rs 1,462.35 on September 29.

However, the traders pumped in huge funds to take the prices to Rs 1,638.65 on December 26. Thus, since July the prices gained about 14 per cent but little movement of about 2 per cent was seen in December.

Similarly, the guar gum prices surged to Rs 5,954.15 a kg on September 1 from Rs 3,911.25 on July 1. The prices, which came down to Rs 3,966.10 by September end, again sprang up to Rs 4,558.5 on December 26, thereby gaining about 16 per cent from the July level.

Guar seed and guar gum prices move in tandem not only in physical markets but on exchanges as well. Therefore, whenever, guar seed prices rise guar gum follows suit.

The fall in prices can be attributed to estimated supply surplus of 35 lakh quintal this year. The fresh arrival of about 50-55 lakh quintal along with the opening stock would account for a total of 80-85 lakh quintal against the domestic demand of 55-65 lakh quintal this year.

"Earlier the traders had a bullish intention but when the surplus production estimates were published, bearish sentiment started plugging in and put a check on rising prices," said Sanjay Agarwal of Sanjay Trading Co - a Bikaner-based trading house.

Bumper production is expected from all the corners this year.

Haryana is expected to produce 15 lakh quintal while Rajasthan and Gujarat are estimated to contribute about 30 lakh quintal and 6-7 lakh quintal respectively. This would account for a surplus of about 13 lakh quintal compared with last year from these states.

Guar seed and gum prices are expected to touch their respective fresh highs of Rs 2,000 and Rs 5,000 in the first fortnight of January next year. After that the substitution-affect may pull prices back to normal, Agarwal added.

India accounts for 80 per cent of the total guar produced in the world, of which 70 per cent is cultivated in Rajasthan.

Apart from Rajasthan, it is also grown in Gujarat, Haryana Punjab and some parts of Uttar Pradesh and Madhya Pradesh.

Guar is being grown in India since ancient time. Tender-green guar is an important source of nutrition for animals and humans and is consumed as a vegetable and cattle feed. The guar legume plant is an agricultural product grown in arid zones of west and North West India and parts of Pakistan.

Pakistan, Sudan and parts of USA are the other major guar growing countries. About 75 per cent of guar gums or their derivatives produced in India are exported mainly to the US and the European countries.

This year onwards exports orders are expected from Arabian countries also. The value added derivatives of guar powder are used by the various industries in India as well as abroad.