Tuesday, April 14, 2015

Future of Guar Market

The market of guar has witnessed a shift which was quite unexpected for the participants in the industry. The mean price of guar from 2007 to 2011 was moving around Rs. 2000/qt./qt. to Rs. 2100. But the high price fluctuations in the year 2012 the mean price of entire period (2007-2013) shifted to a new high at around Rs. 3600/qt. at Jaipur market. Mean price of last two year was around Rs. 7600/qt. In 2013 the price is moving towards stability with minor fluctuations. 

In the year 2012-13, the export of guar split and gum from India to the world was around 3.3 lakh tonnes. It is estimated that the 20% of output of guar is being consumed within the country. The estimated total output of guar split and gum in the year 2012-13 was around 4 lakh tonnes. The compounded Annual Growth Rate of guar gum industry is estimated at 17.6%. Even if the industry grows with 15% CAGR, the expected size of the market in 2015 will be around 5.3 lakh tonnes.

The production of guar at commercial level has been started in many of the African countries which is expected to overcome the trouble caused to the industry due to fluctuations in the production in India. After the emergence of usage of guar in oil drilling industry, there had not been any new application emerged so far which indicates that the demand will be consistent without much fluctuations. 

Though India accounts for 75-80% of the total guar produced in the world (60-70% is cultivated in Rajasthan) lack of technology on value addition diminishes the profits that can be earned from the crop. Lack of awareness among the stakeholders regarding the commercial value of the crop is resulting in under-exploitation of the crop for export. Meager efforts are made for stabilization of guar seed productivity in the country, since guar is not considered widely as a commercial crop. Countries like USA and Australia are making concerted efforts to grow guar seed extensively and thus production is showing increasing trend in those countries. This may lead to loss of international market for Indian guar gum products.

The future of guar industry is for specialized applications and derivatives. It is envisaged that the industry will move towards product differentiation to meet the specific and niche demand. For example- in food industry there is growing preference for bio-degradable, non-polluting and organic, products. This gives ample scope for leveraging investment, knowledge management, technology and partnerships for technology sharing and transfer. 
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