The continuous surge in guarseed prices with the futures contract hitting upper circuit has raised alarm bells about excessive speculation and a handful of players cornering the product.

But Forward Markets Commission Chairman, Mr Ramesh Abhishek, said there was no major concentration of buyers and sellers but fundamentals are in favour of a price rise.

“Fundamentally, there is very little left-over stocks,” Mr Abhishek said indicating that the rise in prices is due to a strong demand for guar gum.

FMC has sent out a team to Rajasthan to investigate the reason for the sharp rise in price and if speculative activity is exceeding limits or if the buying is genuine. Commodity exchanges have also sent out their teams. The probe is a joint effort of the regulator and exchanges, he said.

The report should be out in a couple of days and appropriate action would be taken based on the teams' findings, Mr Abhishek said.

Although FMC and exchanges have used all regulatory tools such as special margins on buyers, prices of guar seed continued to move up hitting upper price limits on several trading sessions.

Mr Abhishek pointed out that export demand for guar gum this financial year is quite strong.

He was speaking on the sidelines of a function to launch ComFin, a platform for seamless financing of commodity deliveries on Ace Derivatives and Commodity Exchange Ltd.