Leading commodity exchanges including the Multi Commodity Exchange (MCX) and the National Commodity & Derivatives Exchange (NCDEX) have levy a 10 per cent special margin on the long side of all existing guar seed and guar gum contracts effective from December 13. Special margins of 10 per cent would include special cash margin of five per cent on the long side of all running contracts on guar seed and guar gum.
The purpose is to cool down prices, which have risen 30 per cent in the last three weeks.
Since November 18, the near-month guar seed futures on NCDEX went up by 30 per cent from Rs 4,442 a quintal to Rs 5,784 a quintal. In on Saturday’s trade, guar seed futures on NCDEX hit an all-time high of Rs 5,784 a quintal while guar gum recorded a new high of Rs 18,550 a quintal. Guar gum futures shot up 33 per cent from Rs 13,915 a quintal on November 18 to Rs 18,550 a quintal in on Saturday’s trade.
Guar gum, a derivative of guar seed, is widely used in oil drilling, paper, textiles, mining, explosives, ore floatation and many other industries.
“In today’s trade guar seed and guar gum prices have zoomed to all-time high, but profit booking will be seen in the next few trading sessions,” said Ajay Kedia, managing director of Kedia Commodities, a Mumbai-based broking firm.
In a move that could ease the price further, the government is also contemplating on imposing 20 per cent export duty on guar gum. If done, this will increase the price of the commodity in international markets, traders said. India is the largest exporter of guar gum in the world by supplying 90 per cent of the total world consumption.
Export of guar seed derivatives (gum and meal) from India have shown a phenomenal growth of 85 per cent, from 218,000 tonnes in 2009-10 to 403,000 tonnes in 2010-11.
Export orders have begun to come in for guar gum, which is supportive to the prices. Also, arrivals are delayed in the spot markets, which are supportive for guar gum and guar seed prices, an analyst said.
In Rajasthan, 2.76 million hectares were covered under guar this season, compared to 3 million hectares last year. Similarly, in Haryana the sown area under guar this year is 215,000, compared to 256,000 hectares. Rajasthan and Haryana together account for more than 50 per cent of the acreage for the guar crop.
However, since guar seed is a rain-fed crop, traders expect guar seed production to be higher by 16 per cent at 1.4 million tonnes (14 million bags) compared to 1.2 million tonnes (12 million bags) last year, thus reflecting an increase of 16 per cent.
