Guar gum exports picking up again

Exports from October were up 85% and in September they were up 30%

There has been a spurt in guar gum export in October, following the hike in demand from international food and oil exploration companies. From last October, the export has gone up 85 per cent.

Industry officials said with prices stabilising at lower levels, orders from overseas players have started picking up. Guar gum has been a top agri commodity in the export basket for the last two years.

“After a gap of two years, guar gum is once again in demand from the food industry of Europe and the US. At present, 50 per cent of guar gum export goes to oil sector and an equal percentage for food industry. One of the reasons for the hike in demand is lower prices of guar gum. Prices have fallen to Rs 150 a kg, and in the coming month, there may be further fall in prices. Besides, substitutes of guar gum are costly, which again has pushed the demand,” said Suman Jain, owner, Vasund-hara Gums & Chemicals.

The price trend is subdued because this kharif guar production is expected to touch about 2.3 million tonnes (mt). Adding it to the production in rabi season, the total is estimated to reach 2.75 mt. In 2011-12, the total guar seed production was 1.45 mt.

In March 2012, a kg of guar gum was being sold at Rs 300 while, now, the price is about Rs 50. “Guar gum prices have been stable for the last one-and-a-half months. This has increased the demand,” said Santosh Jhanwar, vice-president, consulting, Agriwatch.

According to an official associated with an exporter, prices of commodities like xanthan is 30 per cent higher than that of guar gum. The official said when guar gum prices were high, several Indian farmers have increased their area of cultivation. Even Chinese and Australian farmers had shifted to guar. However, with prices falling sharply, farmers in other countries started losing their interest.

However, with increased production, arrivals have also picked up. About 6,000 tonnes of guar seeds arrive daily in the market, and prices in futures are quoted lower than spot indicating the prices would remain subdued.

Keeping this in mind, the regulator, Forward Markets Commission (FMC), has “decided to remove the existing special margin of 10 per cent on long side of all running and yet to be launched contracts of guar seed and guar gum traded on national exchanges”.