Guar gum futures jump for second straight day
Kolkata: Guar gum futures prices jumped higher on Thursday, second consecutive session gain this week, on anticipation that the monsoon this season may be weak on account of El Nino coupled with growing export demand from the country. The carryover stocks of guar seed is expected to be lower this season due to lower production during last two years and improved guar gum exports in 2016/17.
The most active contract for May delivery on National Commodities and Derivative Exchange (NCDEX) was up 3.13% at Rs. 8,755 per quintal. It touched a high of Rs 8,820 today. The guar gum prices in the futures market surged more than 37% in the current calendar year. Lower acreage during the last year due to lower price realization by the farmers and an increase in export demand is the main reason of price surge.
Earlier, weather forecasters across the world have confirmed a weak El Nino in the Indian sub-continent for this year which will have small impact on the crops. "However, Skymet a private weather forecasting agency had predicted that Western India will likely to experience a deficit rainfall and the monsoon will be below normal in the country," said Ritesh Kumar Sahu (Fundamental Analyst – Agri Commodities), Angel Commodities Broking
The exports of guar gum during 2016/17 have been encouraging. According to Agricultural and Processed Food Products Export Development Authority (APEDA), India's guar gum exports were 366,938 tonnes, up 23.5% on year for the period of Apr-Feb in 2016/17 compared 2015/16 same period. The increase in export demand for guar gum is mainly due to increase in number of oil rigs in the US this year resulting in higher oil drilling and shale gas exploration, which needs guar gum as a fracking agent.
The most active contract for May delivery on National Commodities and Derivative Exchange (NCDEX) was up 3.13% at Rs. 8,755 per quintal. It touched a high of Rs 8,820 today. The guar gum prices in the futures market surged more than 37% in the current calendar year. Lower acreage during the last year due to lower price realization by the farmers and an increase in export demand is the main reason of price surge.
Earlier, weather forecasters across the world have confirmed a weak El Nino in the Indian sub-continent for this year which will have small impact on the crops. "However, Skymet a private weather forecasting agency had predicted that Western India will likely to experience a deficit rainfall and the monsoon will be below normal in the country," said Ritesh Kumar Sahu (Fundamental Analyst – Agri Commodities), Angel Commodities Broking
The exports of guar gum during 2016/17 have been encouraging. According to Agricultural and Processed Food Products Export Development Authority (APEDA), India's guar gum exports were 366,938 tonnes, up 23.5% on year for the period of Apr-Feb in 2016/17 compared 2015/16 same period. The increase in export demand for guar gum is mainly due to increase in number of oil rigs in the US this year resulting in higher oil drilling and shale gas exploration, which needs guar gum as a fracking agent.