Guar gum exports rise but price slump dents realisation

Exports of guargum was up by 9% in China and 4% in US in terms of quantity for the first two months

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Fuelled by demand in China and the US, guar gum export from India in April-May rose nearly 12 per cent but realisation fell 57 per cent due to lower prices.

In these first two months of the financial year, the export realisation from guar gum was $611 million (Rs 3,227 crore, from 109,455 tonnes) against $1,428 million (Rs 7,600 crore, from 97,897 tonnes) in the same period last year, shows data from the Agriculture & Processed Food Products Export Development Authority.

“The demand for guar gum is coming mainly from China and the US,” said Ashish Gupta, export division head, Vikas WSP. Export was up nine per cent in China and four per cent in the US in quantity over the corresponding period last year. However, realisation was down nearly 60 per cent from US and China export in terms of dollars.

Several European and Latin American countries have also increased their guar gum import from India, say traders. For example, Brazil in April-May imported 670 tonnes of guar gum from India, against 216 tonnes in the same period last year.

About 60 per cent of the demand for guar gum comes from the international shale gas industry and India accounts for about 80 per cent of the global supply.

In 2012-13, our export of guar gum was 408,574 tonnes, worth Rs 21,287 crore ($3,912 million), making it the top agri-export. With the fall in prices, it was the second highest agri-export item in April-May this year.

 

Last year saw an unexpected spurt in gum 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 a  peak of Rs 1,025 a kg in April-May 2012 to Rs 200 a kg by October-December 2012.

There was speculation that high inventory by international energy companies would mean muted demand in international markets this year. However, with increased shale gas exploration and depleting gum stocks with energy companies, the demand had been rising, said traders.

At present, gum prices are Rs 12,500-16,000 a quintal, against a peak of nearly Rs 90,000 a quintal at the beginning of the 2012 calendar year. In the past two months, prices have firmed from Rs 140 a kg on the lower side to about Rs 155 a kg, said Jinesh Dugar, a trader in Rajasthan.