Guar futures to stay firm

Guarseed and guargum futures on the National Commodity and Derivatives Exchange are likely to stay firm over the next one week because of insufficient rainfall in Rajasthan, analysts and traders said today.

"Rains are insufficient for the growth of guar and hence, a good spell of rain is required in the Bikaner, Jodhpur, and Churu regions," said Suresh Mantri, analyst at Ventura Commodities.

Sowing has been slow on lack of adequate rainfall, with only 15 per cent of the area being cultivated. But if there is good rainfall in the next few days, then the sowing operations may gather momentum, Mantri said.

On the other hand, the heavy rainfall in Gujarat may hamper sowing operations, traders said.

"Some damage could be seen in the crop that has already been sown in Gujarat due to heavy rains. However, the full impact will be seen in 2-3 days," said Manubhai Joshi, a Gujarat-based trader.

Low rainfall has resulted in speculative activity and prices have risen sharply over the last few days, said Chowda Reddy, analyst at Karvy Comtrade.

"The pull-back of food products containing guargum from Swiss markets and the ban on guar imports by Hungary will only have a short-term effect on Indian exports, as the matter is likely to be resolved soon by issuing quality certificates," Reddy said.

India is the largest exporter of guargum in the world. The Indian Meteorological Department has forecast isolated heavy rainfall in south Rajasthan and scattered heavy showers in Gujarat over the next 1-2 days, which could pull down prices.

In Jodhpur spot market, guarseed prices were marginally up, in the range of Rs 1,760 - Rs 1,820 per 100 kg, a local trader said.

Prices are likely to rise further by Rs 100 - Rs 150 per 100 kg, as traders expect low rainfall in the coming days.

September guarseed on the NCDEX is likely to move in the range of Rs 1,745 - Rs 1,825 per 100 kg and September guar gum in the band of Rs 4,425 - Rs4,670 per 100 kg.