Commodity spikes

Guargum heads north

Rising export demand is driving the guargum market up. Sources said the upward push in demand would continue for the next month and the market was expected to remain strong till then. Last week saw the April delivery contract almost touching Rs 5,000 a quintal mark, a weekly rise of over 2 per cent.

Currently, the spot prices of guargum in Jodhpur and Bikaner markets are hovering between Rs 5,000-5,025 a quintal, which at the beginning of the week were around Rs 4,925 a quintal. The USA and China are the dominant importers of guargum.

According to commodity analysts, the demand in April-May will be strong on the export front. The market is expected to trade at the upper level between Rs 5,000-5,100 a quintal.

Market sources did not even rule out the possibility of prices touching Rs 5,200 a quintal the next week. They added that millers had healthy book orders till April and availability was not an issue as the last season saw good crop of guarseed.

"If fresh orders keep coming, market will firm up further," added sources. On the National Commodity and Derivatives Exchange, the near-month contract closed this week at Rs 4,930 a quintal against the opening price of Rs 4,881, up 1 per cent. The April chana contract on the National Commodity and Derivatives Exchange (NCDEX) closed at Rs 2,136 a quintal.

Cumin seed may drop

Cumin seed (jeera), which has been rallying fast for quite some time, is expected to see some correction next week once the physical market opens in Unjha.

The overall perspective for jeera is bullish due to a shortfall in production estimates, which are around 15 lakh bags (each of 35 kg = 52,500 tonne) against the last year's production of around 20-22 lakh bags (around 75,000 tonne). Sources said the near-month contract was facing strong resistance level at Rs 13,000 a quintal.

As the spot market will open on Monday (after closing down for four days), arrivals are expected to be better and they might pull down the rates, they added. During the last week, jeera contract for April delivery touched as high as Rs 12,946 a quintal, but could not sustain and rolled back.

The second week of March saw futures rising by 1.85 per cent to Rs 12,506 a quintal, but the last week saw a faster upward push.

The harvest season (Jan-Mar) of the crop is over now. Commodity analysts expect the arrival pressure next week will fix the market trend. On the NCDEX, the near-month contract of cumin seed closed the week at Rs 12,861 a quintal against the opening price of Rs 12,470 a quintal, up 3.14 per cent.

The April jeera contract on NCDEX closed at Rs 12,031 a quintal, down 1.52 per cent from Monday's close of Rs 12,217 a quintal.

Guarseed depends solely on monsoon, and any good or bad climatic news may change the fortune of this cattlefeed overnight. But, no fundamentals support the price rise as of now, the trader said.