Guarseed and guar gum contracts continued to rally on Wednesday despite an additional 10 per cent margin being imposed on long-term contracts from Tuesday. With the additional margin, the special margin on long position is 30 per cent. Totally, anyone wanting to take long position in the guar complex will have to pay a 40 per cent margin.
However, that failed to deter traders from taking long bets on Wednesday as guarseed and guar gum hit the 4-per-cent upper circuit on the National Commodities and Derivatives Exchange (NCDEX) and Ace Derivatives and Commodities Exchange.
According to Angel Commodities, the rally in guarseed and guar gum is supported by fundamentals, especially given a lower production of around 11.5 lakh tonnes against over 15 lakh tonnes last year.
On Wednesday, guarseed January contracts ended at Rs 7,271 a quintal on Ace and Rs 7,272 on the NCDEX. February contracts closed at Rs 7,390 and Rs 7,391 respectively on these bourses. In the spot market, guarseed was quoted at Rs 7,063.80 a quintal at Jodhpur in Rajasthan.
Guar gum January contracts closed at Rs 24,113 a quintal on Ace and Rs 23,806 on the NCDEX. February contracts finished at Rs 24,537 and Rs 24,182 respectively. Spot prices for guar gum at Jodhpur were quoted at Rs 23,496.75 a quintal.
According to an Angel Broking report, reports of discrepancies in latest export data and rumours of manipulations have led to the rally in the guar complex. While April-July exports were pegged 82 per cent higher at 1.93 lakh tonnes compared with last year, the April-August numbers show a 5 per cent drop in relation to April-July data.
Demand for oil drilling is said to be the main driver of the country. A lower carryover stock is also lifting the counter.
According to Geojit Comtrade, guarseed January contracts could face resistance at Rs 7,376 and beyond that at Rs 7,641. Guar gum January contracts could run into resistance at Rs 24,583 and after that at Rs 25,552.