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Guar Market Update
July 10,2006
This year Guar Crop started arriving in the Market; with little or no effect on the prices of Guar Gum powder and Dehusked Guar Splits. The prices of Guar Gum in India are US$ 1050 pmt and in Pakistan is US$ 1050. The Guar seed prices have remain the same, in Pakistan; while in India the prices have remained stable with a little upward trend, despite the arrival of new crop.
Initially, there were forecasts of Bumper harvest, both in India and Pakistan. The crop is reported as good, but consolations are with above average harvest reports. However the above average crop is the best, Pakistan has seen in last 3 or 4 years. India was also expecting a record-breaking crop, which could not be realized, still the crop size is above average.
The factors affecting the forthcomming crop are rains in September, which are considered as vital for the crop. Though the expectation for good monsoon is there.
This year's crop size in Pakistan is stated as 1.400 million bags and a carry-over stock of 150,000 bags. In India the projected crop size is 6.500 million bags, out of which 2.000 million bags are, reportedly from newly introduced irrigated fields, with a carry-over stock of 1.000 million bags.
The Pakistani crop would be able to produce 38,750 metric tons of Guar Gum & Splits. While the Indian crop would produce 187,500 metric tons of Guar Gum & Splits, making the total production of Guar Gum & Splits as 226,250 metric tons. The total world demand for Guar Products is expected not to exceed 150,000 to 160,000 metric tons. It is evident from the statistics that supply would exceed the demand.
The demand/ supply position may not affect the pricing, drastically, as the offsetting factors; high inflationary trends would out-weigh the benefits of above economic principle. The Guar Gum Industry in India and Pakistan has to pay very high Oil & gas bills, Electricity charges and Higher Salary & wages.
The coming year holds promising situation for the Guar Gum Industry, achieving capacity utilization of 85 to 90 %; after several years of depression. The smooth and stable supply position would restore the confidence of the Buyers, stirring hectic activity in this business.