India Guar Ends Higher On Demand; Seen Opening Up.

India's guar futures ended higher on Monday, supported by robust demand for guar gum from millers to meet export obligations and active buying by stockists amid falling arrivals, analysts said.

Guar futures are expected to open firm on Tuesday, they said.

"Demand for guar gum is very good. Most of the demand is coming from oil and gas companies. Demand from these companies is expected to continue to be good," said B.D. Agarwal, managing director, Vikas WSP, a guar gum processer based in Sriganganagar, Rajasthan.

India is the world's largest producer and exporter of guar gum and supplies 80 percent of the global demand.

Industrial guar gum, used as a controlling agent in oil wells to facilitate drilling and prevent fluid loss, is the most sought after guar product and accounts for about 45 percent of the total demand.

Guar gum March NGGH1 contract hit a fresh contract high of 8,095 rupees per 100 kg earlier in the session.

Estimates of higher output, however, capped the gains, analysts said.

Guar seed output in Rajasthan, the country's top producer, may come in at 1.49 million tonnes in 2010/11, the state government's estimates showed.

The estimate has been lowered slightly from the previous estimate due to unseasonal rains during the harvesting operations.

In the Jodhpur spot market in Rajasthan, guar seed slipped 9.5 rupees to end at 2,761.5 rupees per 100 kg.

Following are the closing prices of guar seed and guar gum on the National Commodity Derivatives Exchange in rupees per 100 kg.

Source : reuters.com