Prices look firm on rise in overseas demand

Guar seed and gum prices on the National Commodity and Derivatives Exchange are likely to remain firm in the week ahead on expectations of increase in overseas demand amid good buying from millers, traders said.

"Millers are continuously buying as global consumer demand for churi and korma, by-products of guar seed used for cattle feed, has increased significantly," said a Delhi-based analyst.

Also, fresh buying interest is expected to emerge from the US due to the depreciation of rupee over the past few days, said Suresh Mantri, analyst, Ventura Commodities.

Prices are also trading firm tracking higher crude oil prices and rising demand from pharmaceutical and food industries, traders said.

Guar gum is also used as a stabiliser, emulsifier and thickener in food, textile, mining, pharmaceutical, and cosmetics industries.

However, high warehouse stock currently may restrict sharp rise in prices.

As on Thursday, guar seed and gum stock in exchange-accredited warehouses stood at over 70,000 tonnes compared with over 63,000 tonnes a month ago.

On the National Commodity and Derivatives Exchange, April guar seed contract is seen in Rs 1,950-2,145 a quintal range in the next few days, Mantri said.

Abhay Lakhwan, a Delhi-based analyst, recommends buying at lower levels.

Spot prices are also seen firm due to good buying from millers and cues from futures market, traders said.

According to Shantilal, a Jodhpur-based trader, guar seed is seen rising by another Rs 50-100 and guar gum by Rs 200 in the next week.

Today, in Jodhpur spot market, guar seed was at Rs 2,040, Rs 15-20 higher than Saturday, and guar gum was at Rs 4,800, up Rs 40-50.

At Bikaner spot market, guar seed was at Rs 1,922.75, up Rs 45 from previous close, according to NCDEX data.