InvestorQ : Guarseed future scenario?
Rajender Aggarwal made post

Guarseed future scenario?

Answer
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Anjana Aiyar answered.
1 year ago


Guar seed is one of the more popular agri commodities that are actively traded on the NCDEX and the MCX. Currently, guar seed futures are trading close to their 4-year high prices on the back of weak monsoon expectations and higher exports of guar gum. The monsoon is around 20% short of normal as of mid-July and although it is expected to normalize by August, the delayed sowing season may have taken its toll on the supply. So prices could remain high on the demand-supply gap.

Over the last 1 year, the price of guar seed futures is up by nearly 20% due to a combination of continuous fall in guar seeds production and a rise in guar gum exports. This has created a surplus demand situation in the Indian economy. The global demand for guar gum arises as a fracking agent for a hydraulic process used to drill oil. The global demand for guar gum automatically increases when crude prices go up. With crude prices at closer to $67/bbl and the domestic demand impacted by the monsoon, you can expect guar seed prices to go up further.