Spot as well as futures prices of Guar fell on Tuesday as lower-than-expected demand weighed on the sentiments.
The demand for Guar gum which is normally at its peak during November and December month every year is not picking up in the current crop season due to overall global turmoil.
However, supply side is also not as strong as last year because production of Guar in the western parts of Rajasthan is likely to decline.
Thus, prices are likely to trade in a very narrow range in the short term.
India export around 80% of its produce every year. Thus, prices are likely to remain steady to weak as long as the overseas demand doesn’t pick up.
Guar prices (NCDEX January Contract) settled at Rs. 1614 per qtl against the previous day’s close of Rs. 1651 per qtl.
RSI is at 40 in the neutral zone. Prices closed below its 5 days, 20 day and 65 days SMA indicating a down trend.
Guar futures are likely to remain sideways for the intraday.
Guar futures are likely to remain sideways due to lack of fresh fundamentals. In the medium to long term, trend would depend on overseas demand for Guar gum which is currently at a very slow pace due to overall economic slowdown. Also, we have to keep a close watch on INR movement as it will impact the exports from India.
Source : Commodityonline