Guargum exporter Vikas WSP Ltd and its Houston-based client, Economy Polymers and Chemicals, plan to distribute some 3,000 tonnes seeds to farmers in Rajasthan to plant guar in more areas this kharif.
As spot prices of guarseed still rule high at over Rs 30,000 a quintal, despite the ban on futures trade, exporters such as Vikas WSP are coming to the rescue of farmers by making more seeds available to them.
“Traditionally, we have distributed free seeds to farmers in Sriganganagar and Hanumangarh districts. This year, considering the high price and shortage, we are expanding our reach to farmers in Bikaner, Churu and Jhunjhunu districts,” said Mr B.D. Agarwal, Chairman and Managing Director of Sriganganagar-based Vikas WSP Ltd.
corporate demand
Guargum, extracted from guarseeds, is used a thickening agent and additive in food products such as instant soups, ice creams and processed meat products. Guargum has also been increasingly used for applications in paper, textiles, ore floatation, explosives and fracturing of oil and natural gas formations.
“The increasing demand from oil and gas companies such as Halliburton and Gazprom is keeping prices high,” he said.
Mr Agarwal, one of the largest exporters, says there's no buy-back condition and farmers can sell their produce to any traders. He pegs the value of the free seeds to be distributed by his company at Rs 93 crore.
“We have been distributing seeds for the past 14 years,” Mr Agarwal said stating that the company has developed seeds in collaboration with the Haryana Agriculture University. Last year, Vikas WSP distributed about 1,000 tonnes of seeds.
Acreage & output
Considering strong overseas demand for guargum and with the commodity still fetching a high price, farmers in Rajasthan, Haryana and Punjab are likely to plant guar in more area this year. Last year, guar was planted on some 30 lakh hectares and the output was pegged at 1.3 million tonnes.
“We expect the area under guar to triple this year,” said Mr P.L. Hissaria, Chairman of Guargum Exporters Association. “Exporters are looking to help farmers with more seeds,” he said.
Large farmers such as Mr Ajay Jakhar plan to plant guar as a crop this year in about 50 acres of his farm. Mr Jakhar, Chairman, Bharat Krishak Samaj, expects the area under guar to go up by as much as five times this year.
Planting has already begun in some areas of Haryana and Rajasthan around Sriganganagar. The area under guar may go up this year, but the output will depend on monsoon and the climate during harvest time, Mr Agarwal said.
This is because guar is very sensitive crop and one rain or wind during harvest can destroy the crop. Prices of guarseed, which ruled at around Rs 4,704 a quintal in early November 2011 are now trading at Rs 30,000 in spot markets in Rajasthan.