Guar seed and guar gum futures witnessed a sharp recovery during the week ended October 19, 2018 due to improved gum demand outlook in the market. Improved demand in major trading centres was supportive of gum prices. Weakness in the Indian rupee against the US dollar in the start of the week added to positive sentiments in the market.
On October 17, guar complex traded on a higher note and pulled up prices by more than a 3 per cent. Guar seed made 3 months high and closed at Rs 4,550 wherein gum futures traded around Rs 9,820 during the week. Oil drillers added 9 rings in the previous week ended October 12, bringing the total count to 869, as per weekly reports of Bayer & Hughes GE Company. Around 6,854 million tonnes (MT) of guar seed and 8,880 MT of guar gum is expected at NCDEX accredited warehouses on November 19, 2018.
Guar complex are likely to trade on a higher note tracking bullish fundamental factors in the market. Active buying by guar gum processor and firmness in guar meal costs is likely to keep prices higher this week. Spot prices are witnessing strong demand amid weak supply in the market. In view of better prices outlook, farmers are avoiding bulk selling wherein stockiest are busy building stocks with every dip in prices. Arrivals are at its peak and harvesting is likely to be completed in most parts of Rajasthan, Haryana and Gujarat.
India exported around 40,667 of guar gum in August lower by 0.6 per cent from the same month the previous year. During the monsoon season deficit rainfall in northwest Rajasthan affected the overall estimation on guar seed production on 2018-19. Amidst these factors, buying is expected at lower levels during the week.
The author is a fundamental analyst at Karvy Comtrade Limited