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Suresh P. Iyengar

Mumbai, Sept 7 Guar seed futures, which have been on the rise, are likely to decline in the short term (three months) as the arrivals from the fresh crop hits the market beginning October.

The production is expected to increase 20 per cent to 10.5 lakh tonnes against 8.5 lakh tonnes last year.

However, the prospect of the crop will depend on the rains in September.

The crop in western Rajasthan requires another two spells of rains, which will decide actual output of guar seed for this year, said an analyst.

Carry-forward stocks are estimated around 25-30 lakh bags. Area under guar seed this season in Rajasthan, one of the major producers, was 1.65 million hectares as on August 4, according to Rajasthan Agriculture Department. In Haryana it is estimated at 40,000 hectares.

“Northern parts of Rajasthan, Haryana and Punjab have received good rains from the beginning of the season. However, the sowing got delayed in the western parts of Rajasthan,” he said.

Arrivals from the new crop will start from mid-September in Haryana and Punjab while in Rajasthan from October-end.

Guar gum exports have crossed 2 lakh tonnes in 2007-08, worth Rs 1,100 crore.

Exports would have been much higher if not for the controversy over contamination of consignments.

“Exports were affected after reports of contamination in few guar gum containers exported to Europe mid-2007. The issue was resolved after visits to India by European experts,” he said.

The Government recently directed all exporters to get quality certification before exporting their wares. Exports this year are likely to grow 25 per cent to 2.5 lakh tonnes this year.

The emerging demand for by-products such as churi and korma in the overseas markets will provide new avenues for exporters of cattle feed.

Guar seed prices have fallen sharply from the recent highs of Rs 2,250-2,300 a tonne to Rs 1,700 due to good rains towards the end of July and higher crop estimates.

The near month November contract has risen from Rs 1,750 a tonne on August 11 to Rs 1,808 on Friday.

Though the short-term prospects look bearish, there may be a recovery in the next six months as farmers may not be willing to offload their stocks at a lower price.

More Stories on : Oilseeds & Edible Oil

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