Guar Seed Stays Cool Ahead Of EU Report

MUMBAI: Guar seed benchmark January futures were steady in a lacklustre market, as traders were cautious ahead of a crucial EU final report on Indian guar gum.

“There was no trigger for strong moves... the EU final report may decide directions,” a Karvy Comtrade analyst said. An EU team which visited India during October to check for possible toxin contamination in Indian guar gum will submit its final report in the next few days.

In a draft report submitted three-weeks ago, the EU team asked for separation of food and industrial grade guar gum to reduce contamination. Exporters, who ship majority of the world’s guar gum, are concerned and are not buying in the spot market, depressing spot prices by nearly 30%, compared to the same period last year, analysts said.

Spot guar seed remained unchanged at Rs 1,572 per 100 kg in Bikaner on buying by stockists, a trader said. Physical markets saw arrivals of around 40,000 bags of 100 kg each, of which around 20,000 bags were bought. Seed stocks in exchange warehouses stood at 44,307 tonnes, as per latest data available.

Meanwhile, turmeric futures showed a negative trend as traders booked profits for second consecutive session, after a rise since the middle of last week.

“The medium term outlook is very positive as exports demand continues to be good. After some correction, prices will rise and may touch Rs 3,000 per 100 kg,” an analyst Indiabulls Commodities, said.

The December contract rose 6.5%, April contract rose 6% in five consecutive trading sessions, while May contract had risen 5.6% in six sessions up to Monday. According to analysts, turmeric sowing in the current crop year has been about 10-15% lower, compared to last year and hence availability of turmeric from new crop is likely to be less in 2008.

In 2007, turmeric production was 5.4 million bags and carryover stock from 2006 was 600,000 bags. Total consumption in 2007 is estimated at 4.8 million bags and 1.2 million bags are expected to remain as carry-over stock for next year. In Nizamabad, a major trading hub in Andhra Pradesh, the spot price eased Rs 2.40 to Rs 2,451.80 per 100 kg. Stocks at exchange warehouses was unchanged at 1,024 tonnes, which is lower-than-expected.