MUMBAI, 8 December 2025: When a lion prepares for an attack, it takes two steps back. The movement of guar prices is currently giving a similar signal. The arrivals of new goods started since Diwali, the prices have been continuously going down. But last week, there was a slight upswing which experts believe is short-lived.
On October 15, guar gum prices in NCDEX futures were at INR 9,350 per quintal. Which fell to INR 8,300 on November 26. Which rose again to INR 8,750 at the end of the week. Similarly, guar seed prices were at INR 5,200 per quintal, which fell to INR 4,600 on November 26 and closed at INR 4,800. Such fluctuations in the market disturb the budgets of small millers and farmers. Therefore, they should arrange trades with safety tool, i.e., hedging.
As soon as the prices increased, there was an increase in the arrivals in the markets. Moreover, now the arrival of new goods has started in Gujarat too. Last week, a total average daily arrival of 90,000 sacks of guar seed was recorded in all the states of Gujarat, Rajasthan and Haryana. At that time, the prices were maintained due to the sufficient purchase of the mills. But the demand for animal feed is very low, along with poor demand for exports. The prices of crude oil are also low in the global market, so experts believe that the demand of oil companies will also remain limited.
This time, the arrival of new goods is delayed in some areas as the rains continue till Diwali. However, if we add this year's production of 10.25 lakh tonnes to the opening stock of 4.39 lakh tonnes of guar seed, the total supply is 14.64 lakh tonnes. The current market situation cannot absorb this much supply. Experts believe that domestic consumption will be 1 million tonnes. Even then, if the price of crude oil remains at the level of 60 dollars for a long time, the consumption will decrease.
When farmers planted guar seeds, the price of guar seeds was INR 5400 per quintal. At that time, if the farmers had bought the put option by paying a premium of INR 200 in the guar seed option deal for the month of November-2025 or December-2025, they would have benefited up to INR 400 per quintal. Well, now that time is gone. Guar seeds are a long-lasting crop. The produce does not spoil for two or three seasons. Therefore, if the price falls further, they should prefer to stock it. The question is how much benefit they will get by buying the put option at this price.
Farmers are protected as the options are delivered with the NCDEX guar seed futures. Currently, there is an open interest of 75,000 tonnes in guar seed futures and 60,000 tonnes in guar gum futures. While the average daily volume in guar seed is INR 120 crore and in guar gum is INR 100 crore, the futures are also quite safe. Due to a slight rally in the beginning of the last week, arrivals also increased. But stockists sitting at the trading centres believe the current rally does not have fundamental support. Therefore, instead of having high hopes, farmers should sell their produce when there is a surge. However, traders say that there is still an arrivals load in both the states of Gujarat and Rajasthan in the spot market. If the market situation remains like this, the carry forward stock will remain high for the next season as well.
