Mumbai, July 30 - Indian guar futures hit the maximum upper limit of 4 percent on Wednesday on strong export demand, firm spot and on technical buying, analysts said.
"Brazil is emerging as a major buyer of industrial gaur gum this year, mainly to be used for oil exploration purposes," said a large exporter in New Delhi.
India exported about 20,000 tonnes of the commodity in July, he said.
India's guar gum exports for the year ended March 2008 are estimated to have risen about 6 percent on year to 200,000 tonnes on strong industrial demand, a top trade official said on Monday.
Industrial grade guar gum accounted for about 45 percent of the exports and food grade about 30 percent.
India is the largest producer and exporter of guar gum, accounting for about 80 percent of the world trade.
"NCDEX September appeared to be in oversold territory and we could see a minor rally," according to a report by Kotak Commodity Services Ltd.
Spot prices rose by 38 rupees to 1,891 rupees per 100 kg in Bikaner, a major trading centre, on export related buying traders said.
Traders' estimation of a lower crop in 2008/09 also added to the rally. Traders in Rajasthan, which produces more than 70 percent of the commodity, see a 30 percent drop in output due to erratic rainfall, analysts and traders said.
Combined open interest rose to 282,900 tonnes from 271,570 tonnes in the previous session, while volume rose to 354,980 tonnes from 323,800 tonnes.
Following are the closing prices of guar seed and gum futures in rupees per 100 kg on the NCDEX:
Guar seed
Sept NGUU8 2,0194.00
Nov NGUX8 2,092 4.02
Guar gum
Nov NGGX8 5,0923.70