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Buoyant demand likely to keep guar seed prices firm

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Newswire18 Mumbai
Guar seed and guar gum spot prices are seen firm in the coming week on good demand in local as well as overseas markets, traders said today.
 
Futures are seen taking cues from spot prices, but may witness profit-booking at higher levels.
 
At 12:57 pm, the National Commodity and Derivatives Exchange's May guar seed was at Rs 2,021 a quintal, up Rs 21 from Wednesday's close. Same month guar gum contract was at Rs 5,114 a quintal, up Rs 67. MCX March guar seed was at Rs 2,063 a quintal, up Rs 25.50.
 
Today, in spot market, guar seed was at Rs 1,990-2,025 a quintal and guar gum at Rs 4,950-4,975 a quintal, traders said.
 
"Market is likely to remain bullish in the coming week, as export demand is good," said Vijay Nihalani, a Jodhpur-based trader.
 
Also, stocks are declining daily due to steady demand from mills and exporters, keeping the sentiment strong, he said. New crop will arrive only in November-December.
 
Report on south-west monsoon is likely to be released by meteorological department by the second week of April, and it is likely to have major impact on prices in the long term, Karvy said in a note to its clients. Monsoon plays a key role in guar seed cultivation, which starts in June.
 
Guar seed spot prices are likely to rise by Rs 50-60 a quintal from today's level, while that of guar gum by Rs 100-200. Futures are likely to rise further in the coming days on good demand in spot market.
 
"Also, good opportunities for arbitrage has led to increased participation, with players buying from physical markets and selling in futures," said Prerna, an analyst from Man Financial. This can be seen from rising guar seed stock in NCDEX warehouses.
 
Also, many traders are holding back stocks in anticipation of higher prices in the coming days, creating an artificial shortage in spot market.
 
"Owing to the long shelf-life of guar, traders are likely to keep some stocks in case a bad monsoon leads to low crop output," said Prerna. However, profit-booking is likely at higher levels.
 
Most-active May guar seed contract on NCDEX may move in the range of Rs 2,020-Rs 2,100 a quintal, and the same month guar gum contract in the band of Rs 4,950-Rs 5,300 a quintal.
 
On Wednesday, guar seed stock at NCDEX-accredited warehouses stood at 28,455 tonne, up 14.3 per cent since the beginning of March.

 
 

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First Published: Apr 06 2007 | 12:00 AM IST

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