Guargum and Guarseed prices to remain firm on lower crop outlook

Guar seed and gaur gum prices, which have increased sharply during the past fortnight, are set to gain further as guar production is likely to be sharply lower on scanty rains in the growing areas.

Guar seed prices have gained 5 per cent in the last fortnight, while the gum prices have increased 15 per cent.

According to market experts, guar production is likely to be only three lakh tonnes (30 lakh bags of 100 kg) in 2009-10 against 10 lakh tonnes last year. At the same time, global demand is expected to remain unchanged. Therefore, the market will witness sharp rise.

Guar or cluster beans is a legume crop that grows best in semi-arid regions in the country. It is grown primarily in Rajasthan. The crop is also grown in Haryana, Punjab, Gujarat and Madhya Pradesh. While guar is seen as a vegetable in the South, it is primarily seen as a raw material to produce guar gum in the North.

Guar gum is used as a thickening agent and additives in food products such as instant soups, sauces, processed meat products, baked goods, milk and cheese products, yoghurt and ice-creams. It is also used in industrial applications such as paper and textile sectors, ore floatation, explosives manufacture and fracturing of oil and gas formations. India is the major producer of guarseed and gum, making up 80 per cent of the total global supply.

The crop in Rajasthan is likely to be two lakh tonnes only, while Haryana’s production will be 60,000 tonnes. Gujarat could produce 25,000 tonnes, while the rest is expected to come from other growing areas. Rajasthan and Haryana contribute 70 per cent and 20 per cent respectively to the total guar production in the country.

While scanty rains have affected the production prospects, another reason for the fall is farmers’ preference for crops such as pulses over guar to get better remuneration. Haryana and Rajasthan Governments’ move to distribute hybrid seeds of bajra, moong and moth has also had its impact on the crop.

Guar sowing was expected to gather momentum after July 25, 2009 but with monsoon being scanty over Haryana and Rajasthan’s Hanumangarh and Ganganagar districts, the outlook has turned bleak.