Commodity spikes

Guar: Bearish view

There was a steady decline in guarseed's January futures last week. Continuous arrivals coupled with good stocks in the warehouses of commodity exchanges did not let the market firm up. However, the arrivals will start declining in the second half of December. Commodity analysts said the market would be bullish in the long-termat a time when millers are incessantly buying from the mandis in Rajasthan and overseas demand is also likely to go up. But in the short-term, the market wouldbe in the Rs 1,640-1,700 a quintal range. The country is expecting around 8-8.5 million bags (each of a quintal). Market sources said the supply could see some constraints as prices were already very low and sellers might restrict themselves from bringing their produce into the market.

In the mandis of Rajasthan, the week saw a steady arrival of around 50,000 bags a day. On the National Commodity and Derivatives Exchange, the January contract closed at Rs 1,646 a quintal on Friday, a drop of Rs 30 from the Monday's close.

Chilli: To get hotter

Despite an expected increase in chilli output this season, prices of the commodity are likely to firm up next week. The signs of a bull-run were seen last week mainly on the back of domestic demand pouring in from the North. Traders are of the view that the rally would be short-lived as the market was heading for long-term bearishness. The spot rates in the Guntur mandis witnessed a rise of Rs 200 to Rs 3,600 a quintal. Reports of farmers' holding back their stocks in order to prevent a further fall in the rates also showed its impact on the market. According to marketmen, the prices will rule at the current levels next week. However, they added that once arrivals picked up momentum, prices would fall to Rs 3,000 a quintal.