MUMBAI (Commodity Online):Strong market sentiments continued for Guar as low level buying activities started in the mandis.
Postponement of launch of August contract for Guarseed and Guargum by NCDEX have been affecting the market sentiments adversely over last few days.
Overall Fundamentals remained Bullish from good exports, lower production and low stocks but some more short term corrections cannot be ruled our as per traders due to the above factors. The launch of August 2012 contract has been postponed by NCDEX.
Lower productions prospects than earlier estimates, overall strength in Dollar aiding exports and reports of lower stocks are likely to support the market sentiments in medium term however.
Anticipations of further rise in exports in coming weeks could aid the uptrend further as per traders. High demand from China for oil drilling activities have been reported recently thus pushing up the demand for Gum.
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 12.09 lakh tonnes vs 15.46 lakh tonnes in 2010-11(Directorate of Agriculture, Rajasthan) - as per the 2nd Estimates. 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 3.48 lakh MT Guar Gum during April-Oct 2011 vs 1.98 lakh MT during same period previous year up by 75%. Traders expect overall exports to pick up in coming months and cross the 3 lakh tonne mark.
Courtesy:Religare Commodities
