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Guar Seed Highlights
* Guar seed futures declined around 3.65% in last 1-month period while this week prices gained 1.85 while overall sentiments still remain weak due to soaring stock on continuous supplies from growing belts. Pessimistic physical markets due to weak export demand for oil drilling industries also dragged down guar gum prices in futures trade.
* Guar crop is short this year and arrivals are negligible, while demand is firming up.
* Guar crop not ‘promising’, acreage likely to decrease: Acreage of guar may drop by 15-20 per cent in this year’s kharif crop as farmers may not be too keen to sow the crop as it has not yielded remunerative prices in the past year.
* The total area under guar crop is 35 lakh hectares. The total production of guar seeds is around 8-8.5 lakh tonnes in India. Price of guar seed has been hovering around Rs 40-42 per kg and guar gum between Rs 88 and Rs 91 per kg in the past one year.
* As per latest update, area sown in Rajasthan until 24th June 2019 is 159.4 thousand hectares compared to of 53.0 thousand hectares for 2018 Kharif season. Sowing is in initial stages. Area of guar is expected to be lower this year.
* Industry sources say guar farmers may shift to cotton and pulses as they are getting much better prices for these two crops. Cotton has given good returns to farmers which is why there’s a possibility that farmers might shift to the crop from guar.
* North America’s oil rig companies aren’t ready to buy good volumes of guar gum for hydraulic fracturing, a technique used to extract oil and natural gas trapped in shale rocks.
* The North American oil drilling industry is now using cheaper fracturing material such as slick water instead of guar gum. That is why the demand for guar gum isn’t picking up.
* The prospect of good kharif planting and premonsoon rains in the country, has led to a fall in the prices of guar, castor, soyabean, tur and urad since the past one week. Planting in irrigated areas has begun and, looking at the trend, the prices are correcting. A slow demand from oil exploration companies in America too has attributed to the fall in prices.
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