Guar seed, gum prices slump to 10-month low

Spot prices of guar seed and gum have plumetted to a ten- month low of Rs 1591 per quintal and Rs 4368 per quintal respectively on expectations of bumper production following sufficient rains in Rajasthan and Gujarat.

Guar seed is a rain-fed crop that requires frequent rains and major guar producing states have received ample rainfall this season raising the crop estimates for the current year.

Experts estimate the output to be around 8 million bags of 100 each this year as against the normal production of 5-5.5 million bags.

Rajasthan, Gujarat, Haryana, Punjab and Madhya Pradesh are the major states producing guar seeds in the country.

At the MCX, guar gum was quoted today at Rs 4,316, 18 per cent down as against last month's price, while guar seeds was quoted at Rs 1,573 registering two per cent decline from yesterday and down by more than 18 per cent in the last one month.

Experts expect stockholders would rush to release last year's stock and therefore, the arrival in the state mandis would multiply in the days to come. Hence, there is hardly any chance of price going up, they said.

Rajasthan which accounts 90 per cent of the total guar produced in India, has reported heavy rainfall during the season. Guar seed prices declined by 32 per cent from its all-time high of Rs 2,321 on May 13 even as the price was expected to go further up owing to the lack of rains in major guar producing states.

Guar gum prices declined by 28 per cent to Rs 4,368 from Rs 6,029 on May 13.

On the futures market, in the last three days, the open interest of both these commodities declined nearly 10 per cent on the NCDEX as active traders kept away from the market because of the huge availability of stocks in spot market.

The open interest for guar seed September contract was down by 8,010 MT at 33,160 MT and that of guargum September contract declined by 1,185 MT to 4,840 MT during the last five trading sessions.

In futures, guarseed price for October fell by Rs 72 to Rs 1,657 and of guargum by Rs 200 to Rs 4,179 in the last five days.