Guar gum farmers in no mood to reduce acreage despite lower prices

Expect better returns than crops such as cotton

Notwithstanding sluggish export demand and dwindling returns on the seeds, farmers are in no mood to bring down the area under guar cultivation this kharif season. This is because it is likely to give them better returns than crops such as cotton. If so, this would help the food processing, textile, personal care and paper industries. The price of guar gum is expected to remain low on the projection of a good crop and substantial inventories with farmers.

About 90 per cent of the guar gum manufactured in India is exported. Guar exports have fallen by 40 per cent due to subdued demand of the oil drilling industry of the US. China, Europe, Latin America and Southeast Asia also import guar gum from India but the demand has been tepid for two years.

Vijender Sehrawat, a farmer from Birohar village in Haryana, has close to 60 quintals of guar seeds from last year's crop and many in his village stocked 100 quintals and more (guar seed has a shelf life of three to four years), hoping to get higher returns. The price fell 200 per cent over the past year but farmers haven't given up. Farmers in parts of Haryana and Rajasthan have started sowing guar. It will pick up with the onset of monsoon. Rajasthan, Haryana and Gujarat are the major growing states.



On an average, a farmer spends about Rs 50,000 per acre. At current prices, a farmer could get about Rs 40,000 per acre.  According to G L Sarda, president of All India Guar Manufacturers Association, the demand for gum is depressed owing to international factors (a drastic fall in crude oil price and consequent slowdown in oil drilling in the US). But the industry is expecting a revival in demand.

Rajesh Kedia, director, Jai Bharat and Chemicals Limited, said the guar gum manufacturers are expecting a revival in demand, as the exporters might find it more lucrative to buy guar gum at existing prices.

“The food processing, pharma, paper and other industries are also growing so there is no panic situation. As guar has a good shelf life, we can wait and watch for correction in international demand.”

While the international demand is driven by the global factors, the domestic supplies are certainly going to be higher as no decrease in the acreage and sticky demand may create over supplies.