Tifac wants guar taken off commexes to arrest price volatility

A think-tank under the Union Science and Technology Department has called for freeing guar gum from the clutches of speculators and commodity exchanges to bring about price stability.
Gaur is currently trading at Rs 8,832 a quintal and the price is expected to remain high on expanding demand from the US shale gas industry and is estimated to shoot up to Rs 11,729 a quintal by 2020, according to the Technology Information, Forecasting and Assessment Council (Tifac).
Similarly, Tifac said in its report on the commodity that while speculation has pushed guar gum volume up in recent past on commodity exchanges, the same has also massively boosted exports which soared from 4.04 lakh tonne worth Rs 2,811.93 crore in FY11 to 7.07 lakh tonne in FY12 valued at Rs 16,523.87 crore.

But in FY13, the volume nearly halved to 4.06 lakh tonne (Rs 21,287 crore), thanks to a massive spike in speculation-driven prices. Again in FY14, volume picked up to 6.02 lakh tonne but the price nearly halved to Rs 11,734.5 crore.
Worried over the volatility in price, the government had asked Tifac to find out the reason and suggest ways to tackle the wild fluctuations in the price of the commodity.
Tifac, the autonomous body under the department of science and technology, is likely to submit the report to Commerce Ministry shortly.

"We have almost prepared the report and is likely to be submitted to the Commerce Ministry shortly," Tifac chairman Anil Kakodkar told PTI.

The report has called for freeing the commodity from the clutches of NCDEX and other commodity exchanges.
"Farmers and industrialists are not in favour of the produce being traded on commodity exchanges. The price fluctuation is mainly due to speculators who have been buying it in bulk to make some fast bucks, and also because of rising demand from overseas markets," TIFAC executive director Prabhat Ranjan told PTI.