Guarseed dips on good crop cues

The guarseed market turned bearish today, with both the futures and the spot prices crashing unexpectedly. The near-month contract was hit by over 4 per cent and closed at Rs 1,620 a quintal against the previous close of Rs 1,688 on fears on excess stock.

Commodity analysts remained clueless about the drastic crash. Market sources said cloudy weather in the Barmer-Churu-Bikaner-Nokha belt in Rajasthan stoked the market with strong bearish sentiment, which is expected to continue for another few days.

They added that the next few days would see the prices hovering around Rs 1,600 a quintal. In Bikaner, sowing has not yet started. Traders said that once it rained, sowing would start in a week or two. In Bikaner (delivery centre), the spot rates slipped from Rs 1,770 to Rs 1,720 a quintal in the wake of drastic movements in the futures market.

"We did not expect such a free fall in the futures. A fall of up to Rs 40 a quintal was anticipated, but it fell by over Rs 65," said a Mumbai-based analyst. Demand is expected only in October.

Already the market has a stock of over 35 lakh bags (each of one quintal). And a carry-forward stock of over 20 lakh bags is expected by the beginning of the new season.

Moreover, a 10 per cent rise in production from Haryana is expected, where sowing is reported to be better than the last year's.

Marketmen said that this season, the guarseed market would remain in a bearish phase. "It does not seem to cross the level of Rs 1,800 a quintal as a result of high stocks," they said.

Interestingly, last week, guarseed futures firmed up and closed in on Rs 1,690 a quintal on account of heavy rains in Sindh, Pakistan (a major producer of the seed). Traders had expressed that due to the expected crop loss, demand would shift to India. However, within a span of four days, the market tumbled.