Guar output to surge this year

The crop estimate is for an output of 2.25 mt, as compared to 1.5 mt last year

Guar seed output in India is set to rise 50 per cent this season, to a record level, due to a big increase in acreage, coupled with favourable climatic conditions.

The sector estimate is for an output of 2.25 million tonnes, as compared to 1.5 mt last year.

“With the extended season rainfall, farmers estimate higher output this season,” said Purushottam Isaria, president, All India Guar Gum Manufacturers Association.

Sowing area for this cattlefeed expanded 20-25 per cent, on hopes of high realisation this year. Last year saw three million hectares sown, said Isria.

“Output is expected to be very high but demand for guar gum is very weak, so there is a possibility for prices to see a drastic fall,” cautions Shantilal Saraswat, a Jodhpur–based guar gum trader.

Prices have been responding adversely for some time to the higher output (and lower demand). Guar seed contracts for delivery in December fell by 3.4 per cent to Rs 4,850 a quintal on the National Commodity & Derivates Exchange (NCDEX), following a similar move in spot mandis. Guar gum, a derivative of the seed, followed and is trading at Rs 13,450 a quintal for December delivery on the benchmark exchange platform.

The price of seed and gum on the NCDEX has fallen 26 per cent and 30 per cent to Rs 5,753 a qtl and Rs 15,391 a quintal, respectively, in the past  month.

Prices are falling because of lower demand from consumers.

“Consumer demand for guar gum, a determining factor for seed supply, has not been supportive. Used as an ingredient for oil drilling, guar gum orders from overseas have been lacklustre, due to huge carryover stocks from last year. This will also cause guar seed prices to fall sharply once arrivals start on the spot markets,” said Biren Vakil, chief executive, Paradigm Commodity Advisors.

Other states have also grown guar seed this year like Orissa, Karnataka and Maharashtra due to which guar seed acreage has gone up.