Guar gum is India’s largest commodity export to the US.
“From the global supply perspective, India is currently a dominant global producer of guar, accounting for about 80 per cent of world production. In India, the largest production centres are Rajasthan and Gujarat, which is where the big export surge is presumably originating. This concentration pattern provides a possible explanation for the price surge in 2012-13. Anticipation of a drought, which could have significantly reduced production in India (as happened in 2009-10), may have led to advance buying, pushing prices up.”
At New Mexico University’s annual field day at the NMSU Agricultural Science Center this month, area farmers were introduced to the desert crop guar gum. 90% of the world’s guar gum is grown in India. Let’s see what the research at the science center comes up with, and if we can increase the production of guar gum in the US!
Don’t forget about our lab’s guar gum replacements!
Stabilizer EC Description: A proprietary blend of natural gums; non crosslinkable. Uses: It’s synergistic reaction is an ideal replacement for guar gum in erosion control applications as a tackifier, hydro‐mulching and hydro-seeding as a tackifier, oil drilling as a linear gel, and other mid‐viscosity applications.
Stabilizer KK Description: A blend of natural gums; non cross‐linkable. Uses: In hydroseeding as a tackifier and other lower viscosity applications.
Frac ST Description: Cross‐linkable with organic based crosslinkers and performs closest to Guar at same use levels. Uses: Oil drilling industry.
CJ4 Uses: Oil drilling industry.
Stabilizer EX55 Description: A proprietary blend of hydrocolloids. Uses: Carpet printing and continuous dyeing fields.
Stabilizer ECDF Uses: Wet pet food manufacturing
Guar gum is now India’s top farm export, overtaking rice and cotton. Thanks to the US oil and gas industry, the natural product, guar, is in high demand.
“The remarkable shift in US oil imports and its march toward self sufficiency has vital implications for global security and strategic affairs and experts say it will help redraw the global energy and security boundaries.” Pro of fracking: the US is becoming less dependent on the Middle East.
Guar gum pricing is about $7,000/ton, down from $27,000/ton back in May this year.
Also, India normally sells 60% of its Guar to the oil industry and 40% to the food industry. But this year, the food industry has only bought 20% because of the high prices.
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US oil drilling and food companies are turning to Guar gum alternatives. Our company has Guar gum alternatives: for both industrial (oil drilling industry, hydroseeding, carpet dying, leather tanning, explosives, cat litter) and food (bread, ice cream, yogurt, salad dressing, juices, wet pet food). Contact us today for more information.
Guar prices, as usual, have been fluctuating again. This time, they are bouncing back up though. According to guar suppliers and farmers, a fungus has been ruining the guar.
“Whether Guar Farmers Benefited from Price Hike?
However, a pertinent question to ask is: whether guar farmers benefited from the steep hike in prices? The answer is No because guar farmers had sold their produce in the spot markets several weeks before prices began spiraling upward in a manipulative manner in the futures markets.
The guar farmers do not directly participate in the futures markets so as to benefit from upward price movements. The majority of guar farmers are subsistence farmers who sell the crop immediately after harvest and therefore do not store it in godowns/warehouses to benefit from potential price increase in the future.
On the contrary, guar farmers are paying the price for price manipulation in the futures markets as they have to buy expensive guar seeds for their next crop . Besides, several guar gum processing units in Rajasthan have become idle because of abnormal hike in the prices of raw material.”
An aggressive, long-term investor should start buying during periods when stocks are falling. “India has four times the population of the U.S. but less than 10% of its per capita income,” notes Jeremy Schwartz, director of research for WisdomTree, whose India Earnings exchange-traded fund tracks 160 Indian stocks. “We think they’re actually going to catch up over time.”
India has a global monopoly, meeting 80% of world demand even with harvests that have never exceeded 1.5 million tonnes. Currently, production is down 20% while demand from oil industry is up 84%. This imbalance has triggered unusual greed and panic.
A lot of farmers are now turning to guar crop as its use in food processing, pharmaceutical and oil exploration industry is increasing and fuelling demand for guar gum.