GUAR IN A BULLISH PHASE
My another post in www.agriwatch.com on GAUR…its bit old but you can go through it.
As we recapitulate the performance of some of the commodities this year, which is soon ticking away, Guar seems to bring with it good memories, particularly speculative Guar, as it enjoyed voracious trading. Driven by the well-built fundamentals in spot market along with active participation by buyers, Guar complex is proving perky for investors. Guar Seed and Guar Gum have already touched the eye-catching level of Rs.2, 100 and Rs.5, 300 respectively. With the production levels expected to stay at around 70-75 lakh bags and a decent demand from stockists and traders for byaj badla, Guar is expected to trade at an attractive level. The inflow of Guar this year has been better than last year but surging demand by stockists and traders for byaj badla, has lifted up the sentiments of Guar.
India is dominating the international scenario as regards export of Gum. It exports Gum to more or less 76 countries. 90% of the total production of Guar Seed is being processed into Guar Gum for export purpose. India exported Rs.1,067 crore worth of Guar Gum in 2005-06, which is projected to touch Rs.1,200 crore in 2006-07. Russia has moved towards India to meet out its domestic demand for oil drilling. This could lead to a further export order of 10-15,000MT. However, cheaper quotes of Guar Gum by Pakistan are giving stiff competition to India, eating out the Indian share in overseas market. Higher quotes, thus, seem to have a little trouble in the global market.
Increased buying by the “big players” with the intent of ‘byaz badla’ is also lifting up the sentiments of Guar in the market. Demand from mills is expected to surface from mid of December, which could enforce further momentum in the prices. Arrivals are low, as sellers are not offloading stocks in hope of higher prices in the approaching time. However, overseas buyers are strictly watching the domestic Guar crop. The country has witnessed a good yield this season and does not face a severe demand-supply crunch. However, a majority of the stockpile from Haryana is being utilized within the state itself owing to mounting up mills in the state and has lead to low stock arrivals in Rajasthan from Haryana. Rajasthan, Haryana, and Gujarat are the chief Guar producing states in India.
The widespread ambiguity in the market on the subject matter of regulatory measures on the speculative trading in commodities will border the upside in Guar Seed and Guar Gum. Guar complex appears bullish owing to good demand at spot market together with speculative activities. However, FMC, which is keeping a vigil on the future trading of Guar could stiffen the norms if any irregularities trace out. This though might dampen the spirit, on the whole, the trend of Guar is buoyant in the spot as well as future market. Prices on NCDEX are still bullish from January onwards owing to the expectation of decline in arrivals amidst anticipated demand rise.
