The Hindu Business Line : Guarseed futures turn weak

Being a kharif crop, traders look for the onset of monsoon over Rajasthan — the largest Guarseed producing State — for deciding on the futures price trend. Apart from Rajasthan, Guarseed is cultivated in parts of Gujarat and Haryana.

On Monday, Guarseed futures on NCDEX turned weak after the Indian Meteorological Department (IMD) expressed satisfaction over monsoon advancement. "Farmers will start preparing the field for sowing which is expected to start during the last week of this month.

Area under guarseed cultivation may also go up as the prices were on the higher side throughout last year," said Mr Girish Mehta, a commodity trader.

On Monday, Guarseed opened at Rs 1,779 per quintal and dipped to Rs 1,768 as sentiments turned bearish over IMD announcement. It fell further to close on Friday at Rs 1,687. The turnover of guarseed futures on NCDEX during the week was Rs 1,660 crore.

Growing Period

Rajasthan accounts for 70 per cent of India's total production of about 5-7 lakh tonnes of guarseed per annum. "Futures prices are under downward pressure as production this year is expected to be normal with the favourable advancement of monsoon," said another trader.

Main Demand

Guar requires 8-15 inch of rain in 3-4 spells during the growing period and is harvested in October-November. It is sown immediately after first showers in July.

The crop yield is directly related to the rains. It requires a growing period of 20-25 weeks.

Splitting guarseeds produces guar gum and guar powder, which are used in industries such as oil exploration, textiles and dyeing industries.

The main demand of guarseeds is from the US and the West Asia. India accounts for 80 per cent of the total guar produced in the world.

Good future for maize

Maize futures, which was trading flat at Rs 760 during the week is poised to move up in coming days as production is estimated to fall sharply, coupled with increasing demand from poultry and starch manufacturers.

From a low of Rs 741 per quintal in May, July futures touched Rs 782 on June 6 and closed lower at Rs 758 per quintal on Friday.

During 2006-07, India's maize production is estimated at 11 million tonnes (mt) against last year's production of 14.5 mt. "Lower acreage under maize cultivation coupled with adverse climatic conditions in Andhra Pradesh in October and November 2006 wiped off over 10 per cent of the total production this year," said a Karvy Commodities research report.

Landing Cost

The Government's move to allow maize imports duty free till December 2007 has not found many takers as the landing cost works to over Rs 1,000 per quintal, which is higher than spot prices at Rs 750 per quintal.

On the domestic front, maize arrivals at major production centres are slowing down, pushing up spot prices. "July maize futures may touch Rs 850 per quintal," said an analyst.

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