Guar Market Report as on June 29, 2004

As informed to you in our last Guar market report dated April 29, 2004, the Indian Meteorological Department (IMD) had issued a press release on April 15, 2004, predicting a normal monsoon for 2004.

Since then there have been rains in most parts of the country including the Guar growing areas of Kutch, North Gujarat and some areas of Rajasthan. In fact in certain parts of the country the pre- monsoon showers have been three times more than normal.

After the first rains, sowing for the Guar crop was carried out in North Gujarat. Sowing in Kutch and Rajasthan is usually done after the second rains. The monsoon normally hits Rajasthan around the end of June. However the rains now seem to have hit a roadblock. Farmers in Rajasthan , who had got their fields ready after the initial showers, now find themselves looking at a cloudless sky. As a result of the delay in the onset of the monsoon in Rajasthan, the price for Guar Dehusked Splits has shot up by US$ 120 PMT in the last few days. This price rise has been caused by speculators riding piggyback on the weak sentiment in the market. However there is no need to panic just yet!

The monsoon system, in which activity was seen till the 22nd-23rd of this month, has now gone into a lull phase and except Kerala, the rainfall has been scanty. According to IMD, the system is likely to get revived in the first week of July. Hence our advice to customers is to closely follow the market over the next 2 to 3 weeks and not make any decisions, regarding new purchases, just yet.