The country is expected to produce 30 per cent more guarseed this season, thanks to good rainfall and better yield. According to trading sources and commodity analysts, the overall production is expected to reach 10 million bags (each 100 kg) compared with 7.5 million bags last year.
The prospects of better crop have dented the futures as well as spot markets of guarseed. Futures have dropped by 8.4 per cent since the beginning of this month.The arrival has just begun in a minuscule way which is expected to gain momentum by the mid of October.
Sanjay Periwal, a Bikaner-based guarseed trader, said, “This year we estimate that the crop will be around 11 million bags. Haryana is contributing in a big way this season and market expects state to add around 4 million bags.” Reports suggest that the quality and yield of guarseed is better this season.
However, according to commodity analysts, excess rainfall last week in major guarseed producing belts could have caused some damage to the crop. “The crop size is slated to be around 10 million bags,” said Sriram Iyer, commodity analyst at Agriwatch Commodities.
Till mid of July, Rajasthan (the major producer of guarseed) did not see sowing due to lack of rains. But by the end of July when rains started, month of August witnessed better sowing. Rajasthan, Haryana, Gujarat, Punjab, Uttar Pradesh and Madhya Pradesh are the states which produce guarseed. Rajasthan is expected to add around 5 million bags alone while rest of the produce will be from Gujarat and other states.
According to traders, overall guarseed market will not soften much. “Export demand of guargum (finished product of guarseed) is good from China and European markets. The domestic as well as export markets have a consumption of 10 million bags. If rates of guargum remain between Rs 4,200 -4,600 a quintal, guarseed will touch Rs 1,800-1,900 a quintal,” said Periwal.
In the physical market of Bikaner, prices of guarseed are hovering at Rs 1,630 a quintal whereas in Jodhpur spot market it is trading at Rs 1,750 a quintal.