The Hindu Business Line : Trading interest shifts from guarseed to gum

GUAR gum future prices at NCDEX have moved up by nearly 12 per cent in April on continued speculative buying and shifting of trading interest from guarseed to guar gum, traders said.

Trading volumes in guar gum have also moved up substantially in this period.

Guar gum May contracts jumped up to Rs 4,735 a quintal on Thursday from Rs 4,235 quoted on April 2, up 12 per cent. Similarly, Guar gum June contracts also rose to Rs 4,870 a quintal on Thursday from Rs 4,329 a quintal on April 2.

Guar gum spot prices in Jodhpur market rose to Rs 4,700 a quintal on Friday from Rs 4,130 a quintal during the same period.

"Traders and speculators' interest in the futures market has shifted from guarseed to guar gum as trading margin on guar gum is nearly 10 per cent on May and June contracts, while margin on guarseed is 29 per cent on all the contracts," a local trader said.

Trading volume in May contract has increased to 12,900 tonnes from 3,480 tonnes registered on April 2, while the June contract also increased to 29,265 tonnes from 2,880 tonnes.

"Despite restricted demand for guar gum, prices have been moving up and up. If this situation continues, buyers may shift their purchase interest to other substitute products such as starch," a Jodhpur-based trader said.

On the other hand, guarseed spot prices have moved up to Rs 1,690 a quintal on Friday from Rs 1,560 a quintal on April 2 on limited buying from local buyers.

Guarseed May contracts moved up to 1,732 a quintal on Thursday from Rs 1,677 a quintal quoted on April 2, up by three per cent due to trading restriction imposed by the exchange.

Similarly, June contracts also gained to Rs 1,773 a quintal from Rs 1,716 a quintal on April 2.

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