By: Siddharth Surana, CommAdwise CTA and Vishal Dinesh, India Glycols Ltd

Guar Crop Estimates and

Supply-Demand Outlook for 2014-15

Agenda

• Production Areas/Yield maps

• Weather dynamics and Crop Progress

• Exports Dynamics

• Crop Estimates 2014-15

• Guar Balance sheet for 2013-14 and 2014-15

Production Areas/Yield Maps

MAJOR MARKETS

Weather Dynamics

and

Crop Progress

Copyrights Reserved by CommAdwise CTA

Weather & Crop Inferences

• IMD revises its country-wide rainfall forecast to 93% of the LPA from earlier 95% with N- W taking the worst hit. Lot of talk about upcoming El Nino phenomenon • The month of June gloomy for the country the cum. rain deficit touching 43%. • Arrivals reduced in Haryana, Punjab and irrigated belt of Rajasthan. Due to hailstorm,

farmers were bringing their wheat crop to the mandis first • Competitor crop prices were more lucrative hence farmer preference towards cotton /GN

/ Paddy

• Cotton sowing was reported higher than previous year in Haryana (10-15%) , Parts of Rajasthan ( Sriganganagar / Hanumangarh 3-5% )

• Across India rainfall was around 40% below average in the first week of the season after

five days' delay in entering the country • No pest or disease attack was reported in standing crops • Gujarat summer crop started arriving and daily around 20000 bags

Weather and Crop Progress

• Monsoon arrives 15 – 25 days after normal date

• Parts of Guar belts receive scattered showers with reduced intensity, W. Rajasthan and

Haryana receive below normal rains. Gujarat yet to receive good showers.

• On 10th July: Northern limit of Monsoon (NLM) touches Alwar and Bikaner but no rains

yet, due to south westerly/north westerly dry winds

• Punjab reported to be very low in Guar sowing. 50% Crop shift to Paddy/Cotton

• Rainfall from 1st Jun to 8th Jul in overall India: 42% lower than LPA, North-west at -

45%

• Heat wave conditions continued to prevail over some parts of Rajasthan

• Series of cyclonic circulations moving in Odisha, Madhya Pradesh, Gujarat and

Rajasthan, results in fairly widespread moderate to good rains during 20th -27th July.

• 1st Jun to 28th of Jul, the rainfall deficit in all India was 25%, 37% in north west India

July Sowing Progress-Rajasthan

Date Area (Lakh ha) YoY Change

8 July 2014 5.5 22% higher

15 July 2014 7.14 12% lower

21 July 2014 12.45 2.6% lower

28 July 2014 16.6 23% higher

31 July 2014 19.1 41% higher

Crop Survey Haryana, Northern Rajasthan (13-

15 Aug 2014)

Hanumangarh – Mid July -early Aug Sowing

Irrigated Rainfed

Nohar – late July sowing, Rainfed

Sirsa-Mid July sowing- irrigated

Weather and Crop Progress •Mid June and early July sowing crop damaged partly due to high temperature and lack of moisture. •Guar sowing in Haryana reported to be 20-25% lower than previous year •UP & MP reported lower acreage with shift to Bajra/Cotton •Scattered rains with reduced intensity across guar belts. •Rainfall deficiency compared to long term average in overall India reduces to 17% till 11th August. Deficit in Northwest India is 29% •Rainfall deficiency compared to long term average in overall India was 18% till 21st August. Deficit in Northwest India was 29% again

Aug Sowing Progress-Rajasthan

Date Area (Lakh Ha) YoY Change

4-Aug-14 22.4 3.7% lower

11-Aug-14 29 25% higher

20-Aug-14 31.8 4% higher

27-Aug-14 31.8 8% lower

Copyrights Reserved by CommAdwise CTA

Crop Survey-Western Rajasthan (29th Aug to 3rd

Sep, 2014)

Baytu, Barmer rainfed height apx 1 foot

Jaisalmer Late July sowing- irrigated Height: 2 – 2.5 Ft

Kolayat, Bikaner early Aug sowing-Rainfed height< 1 ft

Bap, Jodhpur early aug sowing- rainfed <0.5 feet

Weather & Crop Inferences • Rainfall deficiency compared to long term average in overall India is 15% till

4th September. Deficit in Northwest India is 33% • Last week of Aug & early Sept, Guar belts of Rajasthan received showers

though scattered but prolonged duration

• W. Rajasthan received more than normal precipitation

• Gujarat received more than normal rains and Guar acreage increased, though preference was more to Castor / Cotton

• Haryana government declared the state drought-affected

• Sowing in Gujarat is in 2.98 lakh Ha till 1-Sep-14; 39% less as compared to 4.71 last year.

Weather and Crop Inferences • Guar acreage across India was lower than previous year

• Overall Precipitation was normal but with intensity was lower and distribution

uneven .

• Crop was subjected to delayed physiological conditions and susceptibility to pest and diseases.

• Yield is expected to reduce due to delayed / abnormal physiological stress.

• At the beginning of sowing season reportedly 40-45% crop of the last year was with the farmers which now stands at 24-25%

• Early arrivals of the new crop in Sriganganaggr are coming as balckish due to untimely rains

Exports Dynamics

Crop Estimates for 2014-15 and Balance Sheet

Kharif Production Estimates- 2014-15

State Lakh MT

Rajasthan 13.6-14.5

Haryana 1.4-1.6

Gujarat 1.35-1.45

Punjab 0.15 – 0.2

UP / MP / others 0.4 – 0.6

Total 17.05 – 18.55

Guar Balance Sheet (Revised as on 16.10.2014)

2013-14 Lakh MT

Carry forward 2012-13 5.3

Production 2013-14 25.4

Availability 2014-15 30.7

Export till Sept'14 18.23 (5.52 GGP)

Domestic consumption till Sept 14 0.83 (0.25)

Carry out to 2014-15 11.64

2014-15 Lakh MT

Carry in from 2013-14 11.64

Estimated Production 2014-15 17.8

Availability 2014-15 29.44

Expected Export till Sept 15 20.05 (6.07)

Expected Domestic consumption till Sept 15 0.83 (0.25)

Carry forward 2015-16 8.56

Stock to use % 41%

Months’ consumption 5

Thanks

Disclaimer: This document cannot be copied or re-distributed in part or full without prior written permission. The information and analysis contained in this document come from sources believed to be reliable; however, no representation or warranty, express or implied, is made as to the fairness, accuracy, completeness or correctness of this information. Nothing contained in this publication shall constitute an offer/recommendation to sell/purchase. CommAdwise CTA accepts no liability whatsoever for any loss, howsoever arising, from any use of this document, its contents or otherwise arising in connection therewith.