Guar prices have jumped about 10% in the last one month due to good export demand for guar gum and excessive rain in the guar growing areas of Rajasthan and Gujarat, which have damaged the crop in large areas.
In futures market, guar seed prices have moved higher by more than Rs 300 per quintal while guar gum prices have increased by nearly Rs 700 per quintal during the last one month. The most active guar contracts for October delivery at the National Commodity and Derivative Exchange (NCDEX) have been trading on a positive note in the last two weeks.
Guar seed prices increased 6.3% or Rs 210 to trade at Rs 3,632 per quintal while guar gum prices jumped close to 9.4% or Rs 676 to trade at Rs 7,724 per quintal during the timeframe. As per the data from the Agricultural and Processed Food Products Export Development Authority, India's guar gum exports for first three month of 2017-18 almost doubled to 145,775 tonne due to higher demand from the US.
"The US is expanding its shale gas production in which guar gum is used as a fracking agent. India mainly exports guar gum to the US, Germany, Russia and China, which is used largely by the oil extracting companies," said Ritesh Kumar Sahu, fundamental analyst, agri commodities, Angel Commodities Broking.
As exports are picking up, the area under guar is also seen higher this season.
Despite higher acreage, there are reports of largescale damage to standing guar crops due to excess rain during the last week in the major guar sowing districts of western Rajasthan. These districts that include Bikaner, Barmer, Jaisalmer, and Jodhpur account for more than 80% of guar acreage in Rajasthan.
According to the Indian Meteorological Department, the cumulative rainfall received from June 27 to July 2 in Western Rajasthan has been 231% of the benchmark long period average (LPA) with rain of 66.8 mm against normal of 20 mm.