GUAR GUM Market weekly market news analysis

By Sunita USA
Oct 16, 2020

Guar Split price trend for this week:

Guar Split prices observed stability with slight fluctuation up and down throughout during this week, i.e. 2020 – Week #41. However, the weekly average Guar Split price increase by 1.25% as compared to the last week, 2020 – Week #40, weekly average Guar Split price. The weekly average Guar Seed price increased by 2.00% against the last week average Guar Seed price. The price fluctuation during this week is due to speculation based on the crop size for this year’s Kharif season, crude oil prices, overseas-demand situation, the supply of Guar in local markets based on the arrival of the new Guar crop from this year’s season. During this week, very limited buying activity observed from the industry. The average Guar Split price during 2020 – Week #41 is INR 62.125 per Kg (USD 0.854 per Kg).

New Guar Crop Update:

During this week, the supply of Guar Seeds in the local markets has increased as compared to the last week. At the moment new Guar crop supply includes increased white seeds than the last week along with a very small quantity of black seeds. Going forward, it is said that as the supply from the new Guar crop increases, the supply of black seeds shall vanish with time.

Overseas Demand:

A slow demand is observed for Guar Gum Powder from the Oil & Gas industry. During this week, Crude Oilprices fluctuated between USD 39.00 USD per Barrel level to USD 44.00 per Barrel level. The demand for Guar meal (Guar Korma) is very good, but Guar Churi is low.

Supply-side – local market:

The arrival of the Guar Seeds during this week is at around 35000 – 40000 bags per day. The trend in Guar Split prices during 2020 – Week #01 to #41 is highlighted below via a graph for your perusal.

Opinion:

The export dependence keeps Guar Split prices volatile. However, Guar Split prices have remained largely stable since June’2020 in the range of INR 53-68 per Kg. As the area sown under Guar during the 2020 Kharif season has reduced compared to the last year and the farmers have preferred cultivating other crops over producing Guar because the prices have been on the lower side, it is expected that new Guar crop production may fall as compared to the last year’s new Guar crop. Also, the industry is carrying a huge carry forward stock. Oil drilling industry, which has been badly hit by the pandemic, is the main user of Guar Gum. The food industry, which is the second-largest consumer of Guar Gum, has come back to using the commodity as prices have fallen. O&G is still importing slick water due to fear of an unexpected surge in the price of Guar Gum. Marketmen expect Guar Split prices to increase within the next fortnight. However, according to these market men, any price increase will not be sustainable for long, as demand may take time to revive even the supply remains strong.

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