Guar – good rains, decent crop, weak demand, lower prices

Guar Crop 2023 estimates/guesstimates

It is a bit early to give out the 2023 crop estimates but on the basis of initial info that has been gathered from the market we can give you the following figures:

  • Guar Seed 2023 crop estimate = 7.5 million bags of Guar Seed of 100 kg each = 210,000 MT of Guar Splits
  • Carryover (guesstimate) of Guar Seed and Guar Splits (equivalent quantity of Guar seed bags considered) = 12.5 million bags of Guar Seed of 100 kg each = 350,000 MT of Guar Splits

Indian Southwest Monsoon 2023

The monsoon has been good for the major Guar growing states of Rajasthan, Haryana and Gujarat (a far third). Please see the map below in which the cumulative rainfall received so far, in the important meteorological sub-divisions for the Guar crop, has been shown:

Source: IMD (click HERE to go to the IMD site)

Guar Gum demand

Guar Gum demand has been weak lately

Guar Splits prices

The combination of good rains, expectation of a decent size crop and weak demand have led to a decline in Guar Splits prices by around 10% over the past 3 weeks and we believe that this is a good opportunity to cover some volume for Q1 2024.

Hope all this info helps you in taking an informed decision about your purchases.

Lastly the picture associated with this post is of dried Guar pods from which the dried and hardened Guar Seeds are obtained for producing Guar Gum!

Guar Crop v/s Demand

As of now the Guar Crop is estimated to be around 7 million bags which translates to 700,000 MT (Metric Tons) of Guar Seed or around 196,000 MT of Guar Splits. If it rains in western Rajasthan (Barmer and Jaisalmer areas) in the next fortnight, the crop figure can easily go up to 8 or 8.5 million bags.

From APEDA the export statistics for Guar Gum + Guar Splits are as under:

Apr17 – Mar18: 366,664 MT
Apr18 – Jun18: 97,411 MT

So it is apparent that if the average monthly export of Guar Gum + Guar Splits continues at the rate of around 30,000 MT/month (based on the above mentioned data), then the upcoming crop is going to fall short of demand. There is definitely a “carryover” from previous years and this will make up say around 50% of the shortfall, but overall it is still looking like a case where demand is definitely going to be more than supply.

Hence it is quite possible that prices may go up significantly from current levels once the peak arrivals of Oct-Nov-Dec are over.

Rajasthan Guar Crop 2018 Update

Given in the table below are the latest Guar sowing figures for Rajasthan – as on 7-Aug-18.

As can be seen, the area covered for Guar is 2806K hectares against a target of 3500K hectares. The overall coverage might increase if the important Guar growing areas of Western Rajasthan receive rains in the next 7 to 10 days.

The Govt. Of India recently announced higher MSP (minimum support price) for a range of crops, including some that compete against Guar). There is no MSP for Guar and as a result Guar has lost out to some other crops this season. And although it is still early to talk about the Guar crop figures for 2018, we believe that the number is likely to be lower than, or at the most similar to, that of last year

SHEFEXIL’s 3rd Round Report on Guar Seeds Production for 2016-17

SHEFEXIL, the the nodal Indian Government Agency for Guar Gum export, has come out with the 3rd Round Report for the Guar Seed crop for the 2016-17 season. The crop survey was undertaken by the Nielsen Company, Mumbai, at the behest of SHEFEXIL, Kolkata.

To view the complete report please click HERE

Guar Crop 2015 Report

Hello everyone

We are writing to bring to you the First Round Report, or the “Dipstick Round”, of Guar seed estimation, commissioned by the nodal Indian Government Agency for Guar Gum export, SHEFEXIL, and carried out by The Nielsen Company.

The sample size for this report was 393 farmers (details given below)

Rajasthan 170
Haryana 60
Gujarat 60
Madhya Pradesh 40
Uttar Pradesh 38
Punjab 25

The first 3 states namely Rajasthan, Haryana and Gujarat (in that order) are the most important states for Guar cultivation. The perception of the farmers from these 3 states, about the 2015 crop, is that the crop is “Bad compared to last year”. This is specified on the last page of the report. Please click here to view the complete report.

However considering the initial estimates of the crop from this year, the carryover from last year and also the low demand from the shale oil industry in the US, it is quite clear that supply exceeds current demand significantly. See table below for further details.

Bags (100 kg each) Metric Ton
Guar Seed Crop 2015 15000000 1500000
Converting to Guar Splits 420000 A
Guar Seed carryover from 2014 5000000 500000
Converting to Guar Splits 140000 B
Guar Splits carryover from 2014 20000 C
Total Guar Splits available in MT 580000 A+B+C
Total Guar Splits available in MM LBS 1279

The yield from splits to powder is dependent on the type of Guar Gum being produced. However considering an average yield of 93%, Guar Gum powder available (93% of (A+B+C)) = 539,400 MT = 1189 MM lbs

Most of the seed that has started arriving into the markets is getting “dematted” and going into the warehouses of NCDEX – the commodity exchange. As regards to pricing, despite the good arrivals from the new crop, Guar seed/splits prices are not declining much further. Hence we believe that although it is unlikely that prices are going to run up anytime soon, we might be now close to the bottom.