Guarseed and guar gum are the most speculated commodities on futures exchanges in the country. In the last few years, monsoon projections have swayed the fortunes of these on the futures and, in turn, the spot market. Two years ago, guar production dropped to a 11-year low to around 2.25 lakh tonnes against the normal 9-10 lakh tonnes. Last year, production recovered to over 10 lakh tonnes.
But guarseed and gum prices are ruling at record levels now.
Currently guarseed is quoted at Rs 3,520 a quintal in the spot market, while guar gum, a derivative, is quoted at Rs 11,190 a quintal. On National Commodities and Derivatives Exchange, the active October guarseed contract is ruling at Rs 3,615, while active September guar gum contract is quoted at Rs 11,370.
“The higher prices will lure growers towards guar this year,” says Mr Purushottam Hissaria, President, Guar Gum Manufacturers Association. Guar is grown in around 27 lakh hectares (lh) in Rajasthan, the main producer, and another 3 lh in Haryana. The contribution of other States such as Gujarat, Punjab and Madhya Pradesh is meagre.
“There have been rains in some growing areas. Sowing has begun in those areas,” says Mr Hissaria. Rajasthan is one of the areas where monsoon has been in excess till now. “Even if rain is delayed, farmers will not shift to any other crop because guar provides handsome gains,” he says.
On the futures exchange, the guar counter is preferred for the flexibility it offers.
Guar contracts can be rolled over if anyone has stocks in the warehouses. They can be rolled over for around six months.
Guar or cluster beans is a legume crop that grows best in semi-arid regions of the country.
While guar is seen as a vegetable in the South, it is primarily seen as a raw material to produce guar gum in the North.
Guar gum is used as a thickening agent and additives in food products such as instant soups, sauces, processed meat products, baked goods, milk and cheese products, yoghurt and ice-creams.
It is also used in industrial applications such as paper and textile sectors, ore floatation, explosives manufacture and fracturing of oil and gas formations. India is the major producer of guarseed and gum, making up 80 per cent of the total global supply.