The monsoons have finally arrived in the Guar growing regions in India, however, some regions have experienced excessive rainfall, which has lead to flooding.
There is a growing concern amongst farmers regarding the current floods in Northern India. The impact of this on the Guar crop will be determined over the coming weeks. The raw material is currently in storage with large financially strong stockists. These stockists will wait to see the impact of the flooding, sowing acreage and demand before liquidating their positions. These stockists are anticipated to hold firm until more information is released. This should stop any sudden increase in supply in the near future.
The prices for crude oil are currently below $45 per barrel, unless the prices of oil increase significantly, we are unlikely to see excessively high prices for Guar Gum.
We are expecting more clarity as to the position of supply and demand towards the end of August or beginning of September. Many factors are yet to be determined, making it difficult to predict the direction of this market.