US shale revival may prop farmers
Guar seed prices are likely to stay in the tough zone; gum may get support from exports
Increase in the US shale gas production is likely to support guar gum prices in the coming months. But large stocks of uncrushed seeds will keep prices under control. Between November last year and February this year guar seed prices have been trading in a tight range of Rs 3,200 per quintal and Rs 3,400 per quintal. Guar gum prices too have been moving sideways between Rs 6,200 per quintal and Rs 6,500 per quintal.
Compared with historically high prices a few years ago, guar prices have been trading lower in the last two-three years. In 2016 too, prices remained subdued for the larger part of the year except the July-September period, said Ritesh Kumar Sahu, research analyst (agri commodities), Angel Commodities.
Around January-February 2016, seed prices were trading around Rs 3,200-3,000 per quintal. By July, crop estimates revealed that the sowing was lesser in Rajasthan, the largest producer of guar in the country. According to the second crop estimates for this year, sowing was almost 40 per cent less as farmers felt that they were not getting right remuneration for their produce.
In 2015-16, the country had produced 2.77 million tonnes of guar seed, which had come down from 3-3.1 million tonnes in 2014-15. In 2015-16, Rajasthan had produced 2.2 million tonnes of seed. But as per the second estimate for this year’s crop, Rajasthan’s production will decline to 1.42 million tonnes. Thou­gh production in Ha­ryana and Gujarat has been stable, their contribution to the total cr­op is minimal. The output this year is estimated to come down to 2 million tonnes.
These estimates saw guar prices going up between July and September. Guar seed prices moved up to Rs 3,500-3,700 per quintal. But by October-November, prices cooled to Rs 3,200 per quintal.
In case of guar gum too, prices were trading around Rs 6,100 per quintal around January-February. By May, they had come down to Rs 5,300 per quintal and between July and September moved up to Rs 6,500 per quintal. By October-November, prices cooled and have been trading between Rs 6,100 per quintal and Rs 6,300 per quintal.

Lower imports from the shale gas sector have been keeping guar prices under check. Subdued crude oil prices had made several shale gas companies close operations in the past couple of years. By December, shale gas production has started reviving and some of the companies have restarted operations, said Sahu
In the nine-month period ending December 2016, the country exported 279,000 tonnes of guar gum. During the same period last year, the country had exported 245,000 tonnes. The trade expects that the exports will go up to 300,000 tonnes this year.
Domestic consumption of gum has been stable. But other byproducts of guar seed like churi korma has been seeing rising demand from the animal feed producers.
Increased export demand for guar gum is expected to support prices in the next three months. Prices can move up to Rs 6,600-7,000 per quintal. But in case of seed, excess stocks will restrict upward movement. Considerable portion of the last three crops is left with farmers uncrushed. Once the new crop comes into the market, the prices will come under further pressure. Seed prices may remain around Rs 3,400 per quintal, said Sahu.
sangeethag@mydigitalfc.com
Columnist: 
Sangeetha G.