Guarseed Falls On Selling Pressure.

Guarseed and Guargum futures witnessed selling at resistance levels and settled 0.78% and 1.49% lower on Thursday owing lacklustre trades at the domestic mandi.

A record export during the FY 2010-11 is the only factor that is supporting the bullish trend in Guar complex in the current crop season (Oct-Sep 2010-11).

However, recent notification for Guar gum exports to European Union may hit exports to some extent as the Indian Gum industry is flooded orders from EU. (Source: The Economic Times)

DGFT notification for exports of Guargum (18th May, 2011) Earlier, consignments of Guar gum when exported to EU were allowed presence of upto 0.01 mg/Kg. of Penta Chlorophenol (PCP). Now, export of Guar gum to EU would be allowed only if it does not contain Penta Chlorophenol (PCP) in any proportion.

The move comes at a time when the industry is flooded with orders from EU countries. We have taken up the matter with Director General of Foreign Trade (DGFT). We are hoping that things will be sorted out this week," said Debjani Roy, executive director of Shefexil. In fact, containers are piling up at Kandla port which is worrying guar gum exporters. (Source: The Economic Times)

Forecast for the 2011 South-west monsoon rainfall ( Released on 19th April) IMD’s long range forecast for the 2011 south-west monsoon season (June to September) is that the rainfall for the country as a whole is most likely to be Normal (96-104% of Long Period Average (LPA)).

According to the IMD official, the distribution of rainfall could be little less than normal over the Northwest and Northeast India due to the impact of LaNina.

Production

There are reports that acreage under Guar seed might rise by 15% to 20% owing to normal monsoon this season and remunerative prices earned by the farmers according to an official of Guargum Manufacturer Association. According to the Rajasthan farm Department, Guar seed output in Rajasthan in the 2010 is at 14.9 lakh tonnes. The estimated Indian output 2010 is much higher than the 4.5 lakh tonnes of 2009-10 and 9.5-10 lakh bags in 2008-09.

India is the largest Guar producing country in the world contributing 80% in total supplies followed by Pakistan with 10% share in world production.

Exports

Exports which were hit drastically lower during the last 2 years, had reached record levels in the financial year ending March 2011.

According to Agriculture and Processed Food Products Export Development Authority, Indian Guargum exports for the period April- December 2010 surged by 82% and stood at 2,79,197 tonnes as compared to 153404 tonnes during the same period last year.

Outlook

Guar futures may trade firm during the intraday owing to demand from local stockists.

However, predictions of timely arrival of monsoon may restrict any major upside in Guar prices during the current week. Prices are expected to trade in the range of Rs. 3060-3350 per qtl levels in the next fortnight.

Source : commodityonline.com