2024, Vol. 7, Special Issue 5

author(s)
Ankush, Dr. Gurnam Singh, Dr. Janailin S Papang, Nilesh Sagwal and Dinesh

abstract
Guar is a highly traded commodity and prone to price fluctuations. Guar (Cyamopsis tetragonoloba) is a drought tolerant, multi-purpose legume crop cultivated mainly in the kharif season in arid environment. India is the largest producer (80%) and exporter of guar in the world. In India, Rajasthan (90%), Gujarat (5%), and Haryana (4%) are the highest producing states of guar. Volatility is the variability of commodity prices around the trend, while wide price movements over a short period of time typify the term high volatility. This study focuses on the extent of volatility in prices of guar at macro level whether an institutional support such as a futures trading could be a solution to the problem of price volatility. The study shows that the inter-annual volatility indices (Parkinson’s index) for guar prices remain same for all the markets except in the year 2012, and 2013. And this was due to government intervention in year 2012 as FMC banned futures trading in India. Coefficient of variation indicated high instability in all the markets under study. Out of these markets Bhattu Kalan market faces highest instability (CV of 88.26%). Coppock’s instability index show highest instability in Bhattu Kalan market (CII of 69.62%). These fluctuating prices increases the uncertainty faced by the farmers in their planting decisions and in earning reasonable as well as stable returns. The study also analyzed the effect of futures trading on the prices of guar. The study also shows that the price of guar is also depending on the arrival of produce in the markets (supply) when year 2012 and 2013 were excluded. Some of the suggestions for the government are ‘Single Vision Strategy’, introduction of drought resistant verities and subsidies for rainwater harvesting structure. On the other hand, farmers should make themselves well informed about market intelligence and futures trading.