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Guar gum futures opened sharply lower on the National Commodities and Derivatives Exchange (NCDEX) on Monday as crude oil prices slipped firmly below $80 a barrel during the weekend.
Profit booking was also witnessed in these counters, as they had surged nearly 14 per cent last month, besides rains across the country have improved guarseed production prospects.
On NCDEX, December futures slipped over four per cent before recovering a tad. The contract was last quoted at ₹11,391 a quintal after having slipped to ₹11,171 and previous close of ₹11,827.
Guar gum January contracts were quoted at ₹11,569 against the previous close of ₹11,994.
Guarseed December futures dropped by over two per cent to ₹6,154 a quintal from the previous close of ₹6,285 and January contracts slid nearly two per cent to ₹6,230 from ₹6,356.
Guar gum and seed prices had run up during the last couple of months on erratic monsoon rains and rise in crude oil prices. Though monsoon is bountiful since September, crude oil prices have topped $80 to keep the counter bullish.
India accounts for 80 per cent of guar gum supply in the global market and it is used for various purposes, more importantly for oil exploration. Above $80 a barrel, exploration of shale oil becomes viable.
Since December last year, guarseed was ruling around ₹3,900 a quintal and guar gum around ₹5,720.
On Monday, Brent crude was quoted at $78.75 a barrel and WTI Texas crude at $75.89.
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