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24th Nov, 2013
Guar Scenario
Mapping The Market Thought of
Guar complexby
Nagaraj MedaManaging Director
TransGraph Consulting Pvt.Ltd
11th Oct’2014
© TransGraph Consulting Pvt Ltd Slide
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Guar- Price Outlook
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Guar Seed Jodhpur Spot Market, INR/Qtl Review
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Guar yearly average prices
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Source:TGCrop year: Oct to Sep
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Competitive Crop Scenario
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2000
2500
3000
3500
4000
4500
Guar Bajra Soybean Maize
Farmer realization in Rajasthan ( per ha)
Source:TG & CACP
Last two years in western Rajasthan there has been increase in soybean and Maize cultivation also along with Guar.
© TransGraph Consulting Pvt Ltd Slide
Rainfall in Gaur region during the guar sowing
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Normal Actual Normal Actual Normal ActualRajasthan Gujarat Haryana
20
70
120
170
220
270
320
370
420
470
520
163.5
59.7
370.35
271.4
211.7
98.1
2013 2014
Rainfall during the gaur sowing(Jun-Jul in mm)
In Rajasthan sowing period 72% of rainfall deficit have seen, which have kept lower sown guar sown area this year. Meanwhile in Gujarat 27% deficit was observed and Haryana near 54% deficit rainfall observed.
Source: IMD
© TransGraph Consulting Pvt Ltd Slide
Guar sown acreage in guar region
8
41
4.8 3.91.35
35.42
2.7 2.50.4
05
1015202530354045
Rajasthan Gujarat Haryana Others
2013-14 2014-15E
Guar sown acreage in guar region (In Lakh ha)
-14%
Source:TG & agri departments
Guar sown acreage declined significantly across guar region due to scanty rainfall during the sowing period. In Rajasthan acreage declined near 14%, whereas, in Gujarat and Haryana declined above 35% acreage from last year sown area.
© TransGraph Consulting Pvt Ltd Slide
India Guar sown area
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Source:TG & Rajasthan agri department
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Indian Guar production
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Source:TGyear: Oct to Sep
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Domestic Guar gum demand
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Indian guar gum consumption may decline by 13% for 2014-15 year due to anticipation of rise in guar gum prices by lower production, so Textile and Paper & Paper board industry may turn to other substitute products.
Source:TGYear: Oct to Sep
© TransGraph Consulting Pvt Ltd Slide
Guar gum exports sector wise
12
292
12082
26
298
100
6022
0
50
100
150
200
250
300
350
Shale Food Textile& Paper Others
2013-14 2014-15F
Overseas Guar gum demand sector wise(In 000 tons)
Anticipation of rise in guar prices may impact guar gum consumption in Food, Textile and other industries due to they have alternative (substitute) source at cheaper prices.
Source:TGYear: Oct to Sep
© TransGraph Consulting Pvt Ltd Slide
Expected Guar gum consumption sector wise in 2014-15
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• In total Indian guar gum exports 62% of gum is consumed by US shale industry, remaining is food , paper and textile industry.
• In domestic markets major players are Food, Paper and Textile industries.
Source:TG
62%21%
13%
4%Food industry
Paper & Textile
Pharmaceutical
Cosmetic
Overseas Guar gum consumption Sector wise
60%26%
8%
2%4% Food industry
Paper & Textile
Pharmaceutical
Cosmetic
Others
Overseas Guar gum consumption Sector wise
© TransGraph Consulting Pvt Ltd Slide
Indian Guar gum exports
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Source:TG & DGFTYear : Oct to Sep
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Indian Guar Balance sheet
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Indian Guar seed & Gum Balance sheet( in Lakh tons)
Particulars 2010-11 2011-12 2012-13 2013-14E 2014-15P
Beginning stocks seeds 10.69 5.88 0.99 8.22 7.08Production seeds 12.06 16 24.16 22.06 18.04Imports seeds & Gum 0 0 0 0 0Total Supply Seeds 22.75 21.88 25.15 30.28 25.12
Domestic Consumption and farmer retention in terms of Seeds (A) 4.82 4.66 5.62 7.2 7
Domestic Consumption in terms of Gum 1.2 1.1 1.4 1.71 1.4
Exports in terms of seed (B) 12.05 16.23 11.31 16 14.4Exports in terms of Gum 3.62 4.87 3.39 5.2 4.8Total demand Seed (A+B) 16.87 20.89 16.93 23.2 21.4Ending stocks Seed 5.88 0.99 8.22 7.08 3.6Stock to use ratio Seed 35% 5% 49% 31% 17%
Source :TGCrop year: Oct to Sep
Technical Price Outlook
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© TransGraph Consulting Pvt Ltd Slide
Guar Seed Jodhpur Spot Market, INR/Qtl Preferred-Long Term
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Guar Seed prices, after completion of Cycle wave 2 at INR4080 initiated Primary wave 1 in Cycle wave 3. With in the same, Intermediate wave-1 is completed at INR 6266 and initiated downside correction as intermediate Wave 2 which may culminate near INR 4900 ahead of turning higher towards INR 8500 as Intermediate wave 3 in the next 7-9 months .
© TransGraph Consulting Pvt Ltd Slide 18
Guar Gum Jodhpur Spot Market, INR/Qtl Elliot Wave count-Preferred-Long Term
Guar Gum prices, after completion of Cycle wave 2 at INR 10900 initiated Primary wave 1 in Cycle wave 3. With in the same, Intermediate wave-1 is completed at INR 17440 and initiated downside correction as intermediate Wave 2 which may culminate near INR 13500-13000 ahead of turning higher towards INR 28000 as Intermediate wave 3 in the next 7-9 months .
© TransGraph Consulting Pvt Ltd Slide
Guar Seed and Guar Gum Spot Market Price Outlook
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TransGRAPH Price Outlook
Market Jodhpur Guar Seed Spot Market Jodhpur Guar Gum Spot Market Week Closing INR 5561/qtl. on October 08 , 2014 INR 15641/qtl. on October 08 , 2014
ELLIOTT WAVE Preferred-Long Term Preferred-Long Term
Cycle 3-Up 3-Up
Primary 1-Up 1-Up
Intermediate 2- Down (verge of ending) 2- Down (verge of ending)
Directional Component
1-4 Weeks: Sideways to weak 1-4 Weeks: Sideways to weak
1-3 Months: Slightly positive 1-3 Months: Slightly positive
7-9 Months: Positive 7-9 Months: Positive
Price Range (for 1-3 Months) INR 4900-6700 INR 13000-16000
Price Range (for 7-9 Months) INR 4900-8500 INR 13000-28000
Price Outlook Summery:1)Guar Seed Prices are likely to remain sideways to slightly negative to post a low around INR 4900 initially to set stage for a medium term recovery towards INR 8500-8800 in the coming 6-7 months. 2)Guar Gum Prices are likely to remain sideways to negative to post a low around INR 13000 initially to set stage for a medium term recovery towards INR 27500-28000 in the coming 6-7 months.
Thanking you for your attention.
TransGraph Consulting Private Limited6-3-655 / 2 / 1, A.P. Civil Supplies Bhavan Lane, Somajiguda, Hyderabad - 500 082, India.
+91-40-30685000(4 lines)
[email protected]@transgraph.com www.transgraph.com
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