The guar complex continued to rally with guarseed contracts on the futures market hitting Rs 12,500 a quintal and that of guar gum Rs 41,000 a quintal on Wednesday.
However on the spot market, guarseed prices increased to Rs 12,600 a quintal but guar gum slipped to Rs 40,693.65.
“Guarseed gained over Rs 300 across contracts on Wednesday following the release of export data for April-October,” said Ms Vedika Narvekar, Senior Research Analyst with Angel Commodities Broking Pvt. Ltd.
On the National Commodities and Derivatives Exchange, guarseed February contracts closed Rs 394 higher at Rs 12,565 a quintal. March contracts increased by Rs 373 to Rs 12,630.
Guar gum February contracts were up Rs 36 at Rs 41,310 a quintal while March contracts closed higher by Rs 732 at Rs 41,200.
According to the Agricultural and Processed Food Products Export Development Authority, guar gum exports increased by 75 per cent during the first half of the current fiscal to 3.47 lakh tonnes (1.98 lakh tonnes). In terms of value, they fetched Rs 4,909 crore against Rs 1,260.64 during the same period a year ago.
“Currently, exports are not taking place since guar gum prices have skyrocketed. It is likely that exports could show a downtrend from December onwards. This is because prices began to rally from that month,” said Ms Narvekar.
Prices have almost trebled since December 1 in the guar complex.
The complex has continued to rally despite the Forward Markets Commission that regulates futures exchanges slapping additional margins on guarseed and guar gum. Currently, anyone taking position in the complex has to foot 60 per cent margin in cash.
According to trade sources, the guar complex rally may continue with a section saying that guarseed may top Rs 14,000.
The guar complex rally has been mainly due to export demand for guar gum. Also, this year the crop is seen around 12.1 lakh tonnes against 15 lakh tonnes last year.
Guar, a leguminous crop, is primarily grown in Rajasthan, besides Haryana, Punjab, Gujarat and Madhya Pradesh. Rajasthan accounts for 70 per cent of the crop in the country.
Guarseed is a raw material for producing guar gum. Guar gum is used as a thickening agent and additive in food products such as instant soups, sauces, processed meat products, baked goods, milk and cheese products, yoghurt and ice-creams. It has industrial applications in the paper and textile sectors, ore flotation, explosives manufacture and fracturing of oil and gas formations. India is the major producer of guarseed and gum, accounting for 80-85 per cent of the global supply.