Guargum exports up, realisations fall

Fuelled by demand in China and the US, guargum exports from India in April-May increased by nearly 12%, but realization fell by almost 57% due to lower prices.

 

In the first two months of the financial year, India’s export realization from guargum was Rs 3227 crore (from 109455 MT), against Rs 7600 crore (from 97897 MT)in the same period last year, data from APEDA (Agriculture & Processed Food Products Development Authority) show. 

 

“The demand for guargum is coming mainly from China and the US,” said Ashish Gupta, export division head, Vikas WSP. 

 

Exports of guargum was up by 9% in China and 4% in the US in the first two months of the financial year over the corresponding period last year, data shows. However, realization was down by nearly three fold (136%) from China and more than two fold (148%) in the US.

In addition several European and Latin American countries too have increased their guargum exports from India, according to traders. For example, the April and May this year, Brazil imported 670 MT of guargum from India, against 216 MT in the same period last year. 

 

Last year saw unexpected spurt in guargum prices due to bulk purchases from US shale gas companies in the beginning of the year and very low demand by the end of the year. The prices fell from about peak prices of Rs 1025 per kg in April-May 2012, to Rs 200 per kg by October-December 2012.

 

It was speculated that due to high inventory by the international energy companies, guargum would see a muted demand in the international markets this year. However, with increased shale gas explorations and depleting guargum stocks with the energy companies, the demand for the commodity had been rising, said traders. 

 

At present, Guargum prices are hovering between Rs 12500-16000 per quintal, against a peak of nearly Rs 90,000 per quintal in the beginning of last calendar year. 

In the last two months, guargum prices have firmed from nearly 140 per kg on the lower side, to about Rs 155 per kg at present , said Jinesh Dugar, a guargum trader in Rajasthan. 

 

In 2012-13, India exported 408574 MT of Gaurgum, worth Rs 21287 crore, making guargum the top agri-export from India. However, with the fall in prices, guargum was second highest agri-export item from India in April-May this year. 

 

About 60% demand of guargum comes from the international shale gas industry and India accounts for about 80% of global demand of the commodity.