India Guar Seed To Remain Firm On Strong Fundamentals .

MUMBAI (Commodity Online):No change in Fundamentals were there as Guar continued hitting the Upper Circuit on rising export demand amidst reports of expected fall in production estimates.

Imposition of 10% additional margin on the Buy side did not have any effect on the rising prices as overall Fundamentals remained Bullish. A strong Dollar vs Re supported the export factor even more.

Lower productions prospects than earlier estimates, stronger Dollar aiding exports and reports of lower stocks are supporting the sentiments. Anticipations of further rise in exports in coming weeks could aid the uptrend further as per traders.

Arrivals of the new crop from Rajasthan and Haryana could pressurize the market sentiments. Uncertainties in European markets has been affecting the exports to some extent but traders expect the exports to pick up in coming weeks till year end. Low production and stock prospects could support rates in medium term though.

As per First Advanced Estimates of Kharif Crop in Rajasthan, the sowing area is 29.07 lakh hectares compared to 30 lakh ha last year. Production expected at 11.37 lakh tonnes vs 15.46 lakh tonnes in 2010-11(Directorate of Agriculture, Rajasthan).

Traders estimate that in Haryana too the sowing area has fallen to 2.15 lakh ha vs 2.56 lakh ha last year. Production expected at 2 lakh tonnes while in Gujarat, production estimates at 0.65 lakh tonnes. Better rains in Rajasthan and Gujarat are expected to improve productivity of the crops this year.

As per APEDA, India has exported 1.45 lakh MT Guar Gum during April-June 2011 vs 0.71 lakh MT during same period last year. Traders expect overall exports to pick up in coming months and cross the 3 lakh tonne mark. Financial problems in US and EU are worrisome however on export front.

Source : commodityonline.com