With scanty monsoon, state farmers bet on guar seed

Area under cultivation for the commodity rises by over 56% as compared to last year

Even as crops such as cotton and groundnut are facing a threat of damage and failure in absence of sufficient rain in Gujarat, farmers in the state seem to be increasingly turning to dry crops like guar seed (cluster bean).

As per the state government figures, till August 25, 2012, overall about 78 per cent of the last year's sowing has been completed in the state, while that of guar seed has seen 155 per cent sowing against last year.

Area under guar seed in the state has increased from 114,800 hectares in last kharif season to about 178,000 hectares so far this year, showing a growth of over 56 per cent on year-on-year basis.

"Guar seed has witnessed sharp jump of more than 10 times over the past one year. Which was quoted at around Rs 2000-3000 per quintal a year back, had touched a peak of close to Rs 30,000 per quintal during the year. This, joined with poor state of monsoon in the state, has attracted many farmers in the state to take up guar seed cultivation," said Biren Vakil, CEO, Paradigm Commodity Advisors in Ahmedabad.

However, the prices have fallen from the peak levels and hovered in the range of Rs 10,000-11,000 per quintal. On Saturday, spot price of Guar Seed quoted at Rs 10,500 per quintal in the Jodhpur mandi. The guar seed arrivals were reported at 500 bags. In March this year, guar seed prices touched Rs 28,740 per quintal on the National Commodity and Derivatives Exchange (NCDEX).

"Monsoon has been deficient in the state. This has affected adversely to many kharif crops. As a result, many farmers in the regions like Saurashtra and north Gujarat have adopted guar seed sowing in place of cotton and groundnut," said M V Patel, professor and head of department - agronomy at Anand Agriculture University (AAU).

According to analysts, globally, too, guar seed sowing is likely to increase due to high returns associated with it.

"Guar seed sowing in the US has increased substantially. Other countries including Argentina, Australia and Sudan to are likely to have more area under guar seed. This will bring a situation, when global supply will surpass demand," added Vakil.

Traders in Rajasthan, largest guar seed producing state in the country, expect that area under guar seed will rise by about a million hectares to close to 4 million hectares against 3 million hectares last year.

Guar gum, which is made from guar seed, is extensively used for drilling in the US market. Especially, when the crude oil prices continue to stay firm in the global markets, US drilling companies prefer guar gum to use for hydraulic fracturing process. This boos the demand for guar seed, thereby jacking up the prices.

However, due to increased speculative practices in the futures trading, the commodities market regulator, Forward Markets Commission (FMC) put a ban on futures trading in guar seed and guar gum till September.