GUAR GUM MARKET
Weekly market news & analysis
Saturday 19 December 2020
Guar Split price trend for this week:
Guar Split prices observed a slight increase initially, then remain stable during the week and a decrease slightly towards the end of the week, i.e. 2020 – Week#
51. However, the weekly average Guar Split price increased by approx. 5.00% as compared to the last week, 2020 – Week# 50, weekly average Guar Split
price. The weekly average Guar Seed price increased by 2.25% against the last week average Guar Seed price. The price fluctuation during this week is due to
speculation based on the crude oil prices, overseasdemand situation and 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 #51 is INR 61.875 per Kg (USD 0.847 per Kg).
New Guar Crop Update:
During the end of this week, Guar Seed supply increased compared to the start of this week. However, this week, the supply of Guar Seeds in the local markets
remains similar as compared to the last week. Overseas Demand:
A slow demand is observed for Guar Gum Powder from the Oil & Gas industry. During this week, Crude Oil prices fluctuated between USD 49.00 USD per Barrel level to USD 53.00 per Barrel level. The Crude Oil prices increased from USD 44.00 per Barrel to USD 53.00 per Barrel during this month. 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 #51 is
highlighted below via a graph for your perusal.
As shared earlier, Guar Split prices have remained largely stable since June’2020 in the range of INR 53-68 per Kg. And, the new Guar crop production fell as compared to the last year’s new Guar crop 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 Guar prices have been on the lower side. The slackness in demand in the spot market and increased/decreased supplies from Guar growing regions shall keep driving the Guar gum prices. The
price may increase in an anticipation of a rise in export demand from the Oil & Gas sector. At the moment, increased sea shipping costs due to the prevailing
shortage of empty containers are a concern. Guar Farmers Action: The recent unrest of farmers in India is unlikely to have any effect on Guar availability
Guar Market during CY-2019 & CY-2020:
As we are nearing towards the end of the year 2020, below are the highlights and the trend in Guar Split prices during the CY – 2019 and CY – 2020 so far:
1. During the CY – 2019 Guar Split prices fluctuated between INR 71 to 91 Per Kg whereas in the CY – 2020, so far, the Guar Split price fluctuation range is
INR 47 – 79 Per Kg
2. During CY – 2020 Kharif season, Department Of Agriculture (DOA) targeted Guar sowing of 30,00,000 Ha area in Rajasthan. However, 23,84,700 Ha area which is 79.5% of this year’s targeted Guar cultivation area for this year in Rajasthan (i.e. 30,00,000 Ha area) whereas, during CY – 2019 Kharif season. Guar Seeds were sown in 30,32,800 Ha area which is 97.8% of the targeted Guar cultivation area for 2019 in Rajasthan (i.e. 31,00,000 Ha area)
3. Guar faced its fair share of problems due to the coronavirus-induced lockdown. This period has been marked with widespread disruptions in trade, leading to sharp drawdown in prices based on the demand in the spot market amid supplies from Guar growing regions as mandis had to be shut. It is said that when imports normalize, the demand will be huge, and that will support the Guar price.
4. Sufficient carry-over stock is available in this year
Guar Split Price comparison for CY – 2018, CY-2019 & CY-2020:
U.S. Crude Oil and Natural Gas Rotary Rigs in Operation (Number of Elements) CY – 2018, CY – 2019 & CY – 2020: The below graph highlights the comparison
of a trend in Average Total Rig Counts during the CY – 2018, CY – 2019 and CY – 2020.