MUMBAI (Commodity Online):Rates shot up for Guar yet again on rising demand, low production and stock prospects. Increased arrivals limited uptrend to some extent.
New crop arrivals start fro Haryana. Rajasthan arrivals yet to pick up.
As per First Advanced Estimates of Kharif Crop in Rajasthan, the sowing area is 29.07 lakh hectares compared to 30 lakh ha last year. Production expected at 11.37 lakh tonnes vs 15.46 lakh tonnes in 2010-11(Directorate of Agriculture, Rajasthan).
Traders estimate that in Haryana too the sowing area has fallen to 2.15 lakh ha vs 2.56 lakh ha last year. Production expected at 2 lakh tonnes while in Gujarat, production estimates at 0.65 lakh tonnes.
Better rains in Rajasthan and Gujarat are however expected to improve productivity of the crops this year.
As per APEDA, India has exported 1.45 lakh MT Guar Gum during April-June 2011 vs 0.71 lakh MT during same period last year. Traders expect overall exports to pick up in coming months and cross the 3 lakh tonne mark.
Financial problems in US and EU are worrisome howev-er on export front. It needs to be noted that rates have come down significantly over last 1 month due to lower export demand
Fresh arrivals of the new crop could pressurize the market sentiments to some extent in the short term. However, if exports pick up again, we could see some recovery from these lower levels.
Lower carryover stock and delayed harvesting along with reports of a fall in production and a likely pickup in exports could support the prices. A strong Dollar vs Re could have a beneficial impact on the export front.
Firm Crude Oil prices could have positive impact on the Guar gum export front.
Courtesy: Religare Commodities
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