Sharp fall in guar seed sowing, prices spurt

Guar seed cultivation is likely to come down significantly this year on subdued international demand and better realisation from commodities like moong and moth dal. Prices of guar seeds have firmed up in the past fifteen days as low rainfall in parts of Rajasthan triggered speculations of further reduction in crop size. Such price recovery has happened after two to three years.

Spot prices of guar seed have jumped from around Rs 3,200 per quintal in beginning of July to around Rs 3,600 per quintal, according to data from MCX. Realisation from moong and moth dal is between Rs 5,000 and Rs 6,000 per quintal. This year, exporters and traders had predicted nearly 30-40 per cent drop in production. The area under guar seed cultivation in 2016-17 is likely to be around one million hectare, which is about one-fifth of last year's cultivation on 5.7 million hectare, according to Ganesh Prajapat, agribusiness consultant.

According to Ajay Kedia, director, Kedia Commodities, Rajasthan has seen about 40 per cent fall in guar sowing area from about 13 lakh hectares last year to 7.9 lakh hectares till July 11 this year. In Haryana, the area under guar seed was down by 83 per cent at 35,000 hectares. Similarly, Gujarat has seen about 92 per cent fall in guar sowing area at 4,400 hectares. Last year, total production of guar seed was close to 2.45 million tonnes. According to Kedia, during the first two months of the present financial year, exports were down by 12 per cent at 52,244 tonnes.

Suman Jain, owner, Vasundhara Gums and Chemicals said, "In international market, the demand for guar gum is subdued. This year, sowing is expected to be less by at least 40 per cent." In 2015-16, guar gum exports saw a significant dip due to lower crude prices. India's guar gum exports were close to 3.25 lakh metric tonnes in 2015-16, compared with 6.65 lakh metric tonnes in 2014-15, according to data from Agricultural and Processed Food Products Export Development Authority (APEDA). In value terms, exports in 2015-16 were close to Rs $497 million, against $1,552 million in 2014-15. India's guar gum exports, in terms of quantity, peaked at around 7 lakh tonnes in 2011-12, with value of around $3,446 million. In 2012-13, exports peaked in terms of value at $3,919 million, with around 4 lakh tonnes exports.

"This year, the sowing of guar could be 50-60 per cent of usual cultivation, as not only farmers are moving to other crops, but also there has been a deficit in rainfall. At present, farmers are preferring crops like moong, moth and bajra. Also, farmers are expected to get as much as Rs 8,000-9,000 per quintal from Chana dal," according to Jinesh Dugar, a guar gum trader in Rajasthan. "The requirement of guar gum in the overseas market is low. It continues to remain the same as it was last year," said Om Prakash Soni, partner, Shreeram Industries.