MUMBAI, 18 August 2025: Warren Buffett says – An Investor should be patient, the money of those who make decisions in a hurry goes into the accounts of those who work patiently. However, to invest patiently, one should also have the ability to invest for a long time. Our guar seed farmers do not have such ability. Therefore, they have to sell their produce at the price they get as soon as it arrives. Options contracts have been started at NCDEX now for such farmers. Where farmers can book their minimum profit even before the goods arrive. Since the rains have come early this time, the produce of farmers who cultivate guar seed early will be ready in September.
If we look at the futures prices of NCDEX, the prices have been going down for the last one month. On July 8, 2025, the price of guar gum per quintal was INR 10,165, which fell to INR 9,600 on August 13, 2025. Similarly, the price of guar seed per quintal was INR 5,435, which fell to INR 5,123 on August 13, 2025. This decline is due to early sowing and the expectation of early new crop arrivals. If we look at the sowing figures, on June 30, 2025, guar seed was sown in 10,000 hectares in Gujarat, which was 105 percent more than the sowing on June 30, 2024.
Similarly, guar seed was sown in 5.58 lakh hectares in Rajasthan, which was 383 percent more than the 2024 monsoon. This increase is a clear indication that the new crop will arrive early. However, now the guar plantations are almost complete. The total plantation in both the states is expected to decrease by 5 to 10 percent from last year. But at present, there is no demand in the market and its impact is not visible.
The export figures of guar gum and other guar products of the Union Commerce Ministry also indicate that we have to wait for the time being. From January-2025 to May-2025, India has exported 2.34 lakh tonnes of guar gum and other products. While the average of the last three years is 1.68 lakh tonnes. This means that India has exported more till May-25. Therefore, new export demand may come now when the new season comes.
Rajasthan-based stockists say that now farmers have become a little more aware of options contracts, which is probably why trading in guar seed options for delivery on NCDEX for September-25 looks active from the second week of August-25. Currently, put options have been bought with a premium of INR 100 to INR 245 for a price of INR 5100 to 5500 per quintal.
The current open interest of 9000 tonnes in put options indicates that if the price increases when the season comes, farmers will start preparing for the Rabi season by selling the goods in the spot market. If the price decreases, they will give delivery on the exchange. Farmers who adopt this strategy will be in overall benefit.
Last week, an average of 4000 to 5000 sacks of guar seed were received across the country. Farmers are not bringing the goods as there is no special demand in the market at present. In futures, an average daily turnover of INR 75 crore in guar seed while an average daily turnover of INR 100 crore in guar gum. The timing of the new arrivals will be decided based on how the last round of the current monsoon turns out.
By Kalpesh Sheth is an commodities expert with years of experience.
Image credit: indiamart.com
