National Commodity & Derivatives Exchange Ltd.

Products > Guar Seeds

Spot Price At Basis

Intraday price

Price since inception

Spread Gap

Introduction

Guar seed

Guar (Cyamopsis tetragonoloba) is a leguminous crop, which grows best in sandy soils and needs moderate, intermittent rainfall. It is a hardy, drought resistant bush and is sown after the first monsoon showers between the second half of July and early August. It is harvested during late October-November. Green pods of Guar are consumed as a vegetable.

Guar value chain

Current Scenario

Guar is grown mainly in India, Pakistan, Sudan and parts of USA. India grows 7 to 9 Lakh MT, or 80% of the world's annual guar production. Rajasthan is the major Guar producing state, accounting for 70% of the production. Gujarat, Haryana, Punjab, U.P. and M.P. are other producing states.

Future Prospects

The use of gum in industry is going to only increase in future. In fact, the US Food & Drug Administration department has approved guar as a replacement to fats in food. Guar is a cheaper substitute to Xanthan gum (pure culture ferment) or locust bean gum. The processed food industry in India is expected to grow at a rate of 10% during 2010-2015. New applications and substantial market growth are expected. The same goes for the pharma as well as the personal care industry. These industries are not just growing domestically but internationally as well.

Factors influencing prices

Changes in domestic production due to rainfall fluctuation
Carry over stocks
Surplus available with other exporting countries
Variation in demand of the importing countries
Currency Exchange rate: A relatively strong USD is conducive for exports and vice versa
Government policies: taxes/subsidies etc

Due to high dependence on Monsoons, Guar supply varies largely between years while the demand is consistently growing. Being very hardy, the commodity can be stored for a long period based on demand and market prices.

Guar seed Futures

Given that guar seed have considerable price volatility and that the export realizations have also vacillated between years, Exchange traded guar seed futures are ideal for price risk management needs of the processors, exporters and end users. Those with no natural exposure to guar trade can also benefit by undertaking 'cash-and-carry' arbitrage and 'calendar spread'. Speculators can take directional view on future prices and accordingly take positions in guar seed futures.