GUARSEED / GUARGUM

Guar seed Sep contract at NCDEX extended gains by 0.6% on export demand from the U.S. and China for industrial guar gum. Exporters have contracted at least 30,000 tones of gum for export, mainly to the U.S. by mid-August.

The EU has sought an endorsement from an Indian government trade body in addition to a laboratory certificate to establish that guar gum exports were free from toxin contamination, a trade ministry official told last week.
India's guar gum exports for the year ended March 2008 was estimated to have risen about 6% on year to 200,000 tones mainly on industrial demand. China, which bought 40,000 tones of guar gum in 2007/08, was the second biggest buyer after the U.S.
India is world's largest guar gum exporter and shipped about 224,492 tones during 2006/07 according to provisional data by Shellac & Forest Produce Export Promotion Council, a trade promotion body under the federal trade ministry.

Guar seed carryover stocks fell to 2.5 million bags of 100 kg each from 4.49 million bags a year ago, according to industry estimates.

Guar seed stock on exchange-accredited warehouse rose to 55271 tones, which was sufficient for delivery. Real users wait for such delivery, while speculators usually stay away from the futures market in a situation by squaring off their long positions, pulling prices down.

The Rajasthan Govt has estimated India’s 2007-8 guar output is seen rising to 0.89 mln tones from 0.66 mln tone year ago, according to first estimate. Also strong rupee directly impact Indian guargum industry as India is major exporter and exported ard 13 bln rupee worth of gum in 2006-7. A strong rupee decreases export earnings for Indian exporters which reason in future trade guargum lost more than guarseed today.

Market estimated Guarseed production for this season at 65-70 lack bags of 100kg each against other estimation of minimum 75 lacs and Maximum 90 lacs bags. Traders expect an arrival of around 65-70 lakh bags from Punjab, Haryana and Rajasthan’s Ganganagar this season compared with 40 lakh bags during the last season. Gujarat and some parts of Madhya Pradesh will also contribute to the excess crop, taking the market down.

India is the world largest Guar Seed producer with an annual production ard 6,00,000-7,00,000 tones on which western state of Rajasthan accounted for 70% of total produce by country.