Sunday, 2 July 2017

Why does guar industry need an urgent Govt intervention ?

Guar crop is an opportunity for India. India is not able to explore full potential of Guar.  We will have to find answers of two simple questions: Why we are exporting Guar Gum powder at Rs 80 / Kg? second Why are we importing Guar Gum powder at Rs 500-1200/Kg? Why this difference of Rs 400/Kg - Rs 1100 / Kg is increasing our foreign exchange burden and trade deficit? India produce more than 85 % of world Guar what are those factors which are forcing us to import Guar at 5 -15 time of our export price? 

Guar sowing period is going on. Farmers are sowing Guar it in expectation of Rs 5000 / Kg. Guar need investment in R& D it can be private or it can be govt investment. If Indian Guar Gum industry make some contributory investment then it will give benefit to whole industry. It is an industry of 9000 crore to 10000 crore annuals. If 1% investment goes in R& then industry then within 5-6 years this industry can go up to 50,000 crore annuals. If Govt take this initiative then Govt can earn five-time foreign exchange of what India is getting right now.  Govt has put guar gum under 5 % tax category of GST.  At list 1 % (20 % of collected tax) needs to be returned back to this industry as Govt investment. 


Global chemical players are making huge margin from Indian Guar. Major demand is driven from Oil & Natural gas industry. secondary demand is coming from food & pharma industry. A small intervention can lead Indian Guar industry to new height. Four years before this Industry has given Foreign exchange of Rs 20,000 crore.

Collective post-harvest management and online trading platform can give a long term sustainable growth to this industry. Most of investment in India Guar gum industry is private/individual. Institutional investment and R&D can lead this industry toward new height. There is full potential of growth. Major portion of Guar seed production is going in Cattle feed Industry due to heavy protein content in Guar seed. There is 70-75 % recovery of Guar Churi Korma from Guar seed to Guar gum processing. Agronomically there is requirement of high yielding varieties. Average Guar seed production in Guar growing belt is 5-6 Quintal per hectare. There is good potential to take this production up to 10-12 Quintal per hectare. 

Wednesday, 21 June 2017

Future of Guar seed & guar gum in new production cycle

Monsoon has delayed in Guar growing belt. Minor rainfall is noticed in few areas. As per meteorological department monsoon arrival will be delayed by one weak. It will not affect the sowing of guar in guar growing belt. As major production will come from rainfed area. Sowing of Guar keep going up to last of July in rainfed area. Early sowing guar crop is standing good . 

During last production cycle, Guar prices remained stable with periodic up and down. New production cycle has been started. Farmers and traders both are worried about future of Guar commodity. Sowing area of guar is expected to go down with poor performance of Guar commodity. Farmers will move toward kharif pulses as govt has increased the MSP and pulses has performed better than Guar during last production cycle. Farmers are getting more security in kharif pulses. 


Traders and processors have also stuck in Guar. Many plants have shut down. Guar Churi Korma is giving economic viability to functional plants. No short supply was noticed during last production cycle. There was sufficient arrival of Guar for the processor as per requirement. Supply of Guar is also expected to remain normal in new production cycle. Crop from rainfed area will be sufficient for processor demand. Crude prices are also under pressure due to global crude oil production. It is expected that crude prices will remain around the level of last year. Most of guar gum powder is used in crude oil industry. 

Prices of Guar will remain in same level during next year. It will keep moving around 3000 to 3500 level. For a small period it touched 4000 level but again it slipped toward 3500 level. Guar gum will keep moving around 7000-7500 level. Domestic demand of Guar is not too much. Most of Guar is consumed in cattle feed industry as Guar Churi Korma.  There is sufficient stock of Guar with stockist. Stock of guar will come in new production cycle as storage cost if increasing. There is saturation of Guar with stockist. Monsson is expected to remain normal. If the climatic and cultivation conditions will be in favor of Guar crop then Guar prices may slip below 3000, due to sufficient supply.. 


Monday, 22 May 2017

Pre-monsoon rainfall and future of Guar seed / guar gum

This year guar remained a low-profile commodity. Trading of new crop was started at 3300 and it could not cross 4000 level. Currently it is being traded at Rs 3750. It remained a loss-making business for stockist and traders; as cost of storage, interest on capital and moisture loss were in addition on buying cost. Crude prices in international market was major factor which kept pressure on guar prices in addition existing stock and low demand of guar gum in comparison to last year were another factor which kept prices of Guar moving around 3500.



After all pressure guar didn’t below 3000.Prices of Churi Korma were also profit making venture. International demand is mainly derived from USA, China, Germany and Russia.  It is expected that this year guar cultivation area is going to shrink. IN irrigated area Cotton is major replacement and Pulses will be major replacement in rainfed area. 

Current pre-monsoon rainfall is covering entire Guar growing belt of Rajasthan from Hanumanagarh, Bikaner to Jodhpur and Jalore. Prices will come keep moving toward 3000 with this pattern of rainfall. Early sowing is considered is Good in rainfed area and in Irrigated cotton cultivation will increase as farmers will able to do sowing of cotton in more area with same water. Initial fundamentals are not positive for Guar seed and Guar gum.


Prices will keep moving with subsequent rainfall pattern. Any uneven rainfall weather it is low or high will give boost to Guar prices. Both conditions are agronomically bad for guar cultivation. Rainfall is not only fundamental to decide Guar prices. International political coincidences will also put indirect impact on Guar. Crude output and Crude prices will major fundamental factor which will put impact on Guar prices. Guar prices will adjust steps with international demand or export of guar gum figure. 



Cultivation area of Guar will be major factor which will decide movement of guar for next 12 months. Guar cultivation area and guar prices will run on different tracks. Increasing Cultivation area will lead to decrease in Guar prices. Current contract of Guar in commodity market will carry on up to July and new contract will start in October. Let see whether Guar will shine like Gold or it will remain a Gallow of farmers and traders.  

Thursday, 9 March 2017

What is making guar seed / guar gum to jump up high.

During this trading month guar has climbed more than 25-30 %. It has given return of 25%-30 % within one month. Prices of guar seed is about to touch Rs 4000/100 Kg in physical market and prices of guar gum is about to touch 8500/100Kg. Almost guar has gained 30 % from level of Rs 3000/100Kg and guar gum has gained 41% from the level of Rs 6000/100Kg.

This year production of guar was very low in comparison to last years. It is estimated that there was production of 80,00,000 Bags during last cropping season.  This production was not sufficient for the annual demand. Carry over stock is helping to meet demand of guar for this year. If prices remain below INR 4000/100Kg then cultivation of guar seed will be down in next cropping season.


While discussing with market men it was found that arrival of guar is very low in market and it is expected to remain low specially in two months. Farmers will busy in their farm operation in this month and traders will start to trade in Rabi commodities. There will be problem in smooth supply in markets. Manufacturers are facing shortage of guar seed for processing.

Crude oil prices were also stable over USD50/ barrel during last months and it was a good support for guar in long term to be in bullish trend. There is also news that shale oil production is high in USA.  Trump administration is also positive about the increase in shale oil production.

Export data are positive during last two month. On an average, there is export of 35000 MT guar gum export in one month during last three months. Which was dropped up to 20000Mt/Month during December 2016. There is some news that stock of guar in Housten / Texas is also low.  Export to Other countries is also increasing. Another major demand is coming from Russia. Export data of food grade guar is positive. There is regular demand of food grade guar from European countries. Guar plants are running.



Technically Guar is not shining, it is recovering from down fall. It will remain in recovery trend up to 4500/ 100Kg. After that we can consider some positive movement. Guar gum need more recovery as per current prices guar gum must be around 10,000/100KKg but it is still below 9000/100Kg.

Last year guar seed was arrived at 4500/100Kg and this year it started from 3500/100Kg. If we calculate the cost of commodity + Interest on Capital + Loss of moisture + Storage expenses of Guar seed then guar must be around 4500/100Kg. Last year carry over stock is costing 4500/100Kg as raw commodity and other expenses are double. If current prices will be demand driven, then prices of gaur must be higher than 4500/100Kg (an average of fresh crop and carry over stock) and guar gum must be around 10000/100kg.

Weather data of Monsoon prediction are negative and rainfall is expected to remain late and lower than average and there rumor of poor production in next cultivation season.  But technically If there will be delay in Monsoon then guar production area will increase as cultivation are of other commodities will shrink in western Rajasthan.



Crude prices in international market will decide long term positions of Guar. Geopolitical situation is stable in comparison to last year but it is not improving. It expected to remain plunged and it will be not investment friendly. Market men are looking speculative movement in guar. It is best time to manipulate the demand & prices as supply is tight and export is positive. March Delivery in NCDEX will decide the further price movement. Please avoid the short-term positions.

Thursday, 2 February 2017

Guar is fading its shine ?

Guar remained a low-profile commodity till 2012. It is an industrial crop. There is wide range of application of guar gum powder. Guar is a highest number of industrial application in all agriculture commodities. It is used in food, food processing, textile, paper, printing, mining, oil natural gas industry, cement, pet feed, fish fee, cattle feed, cosmetics, detergent, toiletry, medicinal, pharmaceutical, and much more. After the boom in 2012 it drew global attention and very soon it became a most highlighted agriculture commodity. India is largest supplier of Guar in world. It is cultivated in low fertile, lower water availability and stress climatic conditions.



Farmers of desert of THAR started to see guar as a ray hope. Guar gum processing emerged as an important industry in Guar growing belt. Prices of guar is under pressure of supply since last 4 Year and now farmers are losing the hope. This year everyone is in loss farmers got good return from other pulses crop. Stockist invested the money but prices are going down and down regularly. Interest on investment is giving another wound. Storage loss is worry for farmers and stockist, Guar processing industries are shutting down. Guar is not preforming well in commodity exchange. 

This year cultivation area was low and new production of guar is also low. Farmers have already started to reject Guar crop and cultivation area has shrink 40-50% in irrigated belt. Now stockist are coming out from guar stock, due to continuous negative return. Old stock of Guar is coming in market and it is putting supply pressure. Investors are clearing their stock and entering in other commodities. Guar processing industry are now making profitable return on investment they are recovering tehri expenses from the Churi Korma sale. Viability of guar processing is coming from Churi Korma. Churi Korma is getting tough competition from Soybean de-oiled cake. Soybean prices are low and DOC is available at low prices.

Next 4-5 months are very critical for Guar if prices remain low then cultivation area will shrink. Next year production will further go down. Heavy rain and Low rain both conditions are bad for guar. If climatic conditions remain extreme, then Guar production will further down. Prices of guar are at lowest level. At this level, there are minimum chances of further drop down in guar prices due to strong support of Churi Korma. Generally, supply of guar comes down by the end of December, but this year supply of guar is not coming down due to exit of investors from Guar and old stock is coming in market.  If all the conditions remain positive, then guar may touch 4000 level at upper side. 

Guar is an important agriculture commodity, mismatch in demand and supply has lead it negative growth. Guar cultivation area will shrink further if the demand of guar will rise. Export data of guar gum for this financial will decide the further movement in guar. Demand will remain low in next two month as new contract of guar supply will be signed in next financial year. 



Friday, 30 December 2016

Guar seed & Guar gum prices post demonetization

First stage of demonetization has almost completed. Supply chain of most of commodities have disrupted badly and prices dropped down. Guar prices could remain stable at lower level and no major fall in prices have noticed.

Guar gum split & Guar gum powder are exportable commodity and major portion is exported to USA. There was also some uncertainty in USA about coming president but now it is clear after the USA presidential election. Demand of guar gum will remain positive during Trump era. Trump will support fracking activity and keep USA self-sufficient in oil production. New contract of guar export will be signed and shale oil will remain competitive to gulf oil.



This year guar production was lower than last year and demand of guar seed will rise with growing export. Most of guar seed which is stocked in ware house was stocked at higher than 4500/100Kg level.  Stockist will minimize the loss and they will release guar slowly and slowly toward 4500/100Kg level. We have seen a lot of up and down in guar prices but it is still trying to remain higher than 3200/100Kg level. Guar gum prices are also under pressure but it is maintaining the level higher than INR 6000/100Kg.

Try to avoid selling at lower level, prices of guar seed and guar gum will not go below INR 3200/100 kg and INR 6000/100Kg.  Major peak arrival has stopped now. Supply of gaur seed will be very tight in market. It will remain tight up to next harvesting in October-2017. Demand of guar korma is also good and It is giving support to guar prices at lower level. Currently prices are under advance selling pressure but it will be hard to sell at lower prices for stockist and traders.



Prices of other commodities have fallen but guar is firm at its lower level. Crude oil prices are also growing and it is above USD 50/barrel. Export of guar gum is also expected to rise in coming months.  Guar will also benefit from online transactions. Scenario of guar will change in post Makar Sankranti period. Prices will rise with short supply.



Monday, 12 December 2016

Guar Gum seed Cultivation Consultancy/ Farming Consultancy

Guar is a arid crop grown in Western Part of India. Botanically it is known as Cyamopsis tetragonoloba.  This area is arid area and rainfall is very low. Guar crop is grown here since centuries. Guar seed is processed into Guar gum powder which is used in many industries. In Portuguese guar gum is known as "Goma De Guar" in Spanish it is known as "Goma de Guar". In Germen it is Known as "Guarkernmehl". In French it is Known as "La gommede guar". In Russian it is known as  "Гуаровая камедь". In greek it is known as " κόμμιγκουάρ ". In Swedish it is known as " Guargummi ". In Chinese It is known as "瓜爾豆膠 " In Italian it is known as "Gomma di Guar". In polish it is known as "Guma guar".



Guar is a annual legume crop. It is cultivated in low water condition and well drainage soils for good root development.  Guar is a nitrogen fixation crop. Guar is also used as green manure. Green pos of Guar is used as vegetable purpose like other beans.  Guar plant  is good fodder for cattle. Cooked  Guar seed is used as concentrated for milking cattle's. By product of guar seed processing is known as Guar meal, Guar korma. There is 50-56% protein in Guar Korma.

Guar gum seed is an industrial crop. Guar gum power is used in many industries. Guar gum is used in many food application as  viscosity  agent. Guar gum is also used as stabilizer. Guar gum is widely used in sauces, ketchup, Juice, ice cream , biscuits, Gluten free cooking and many more . Guar gum is  used in printing industry as moisture retention in Ink. Guar gum is used in paper industry. Guar gum is used in textile industry.



Guar gum is widely used in cosmetic items, shampoo, moisturizers, liquid shop, lipsticks and many more. Guar gum is widely used in pharmaceuticals industry as binding agent , viscosity agent. Guar gum is  used as dietary fibres. Guar gum used in fish and meal industry. The major application of guar gum is in oil and natural gas industry. Guar gum is used as drilling chemical in Oil and Natural Gas Industry. Around 60 % demand arise from oil and Natural Gas Industry.


Guar gum is very good agriculture crop and Guar gum is beneficial at every stage, green stage is used as green manure, Green pods of Guar gum are is used as vegetable, Guar gum Seeds is used as cattle concentrate,  We provide complete solution for Guar gum and Guar gum seed cultivation and guar  gum seed processing, with complete market intelligence and product information.

Monday, 21 November 2016

Demonetization and Indian Guar Gum Industry


Prime Minister Nagendra Modi came with scheme of demonetization of Rs 500 and Rs 1000 currency notes to eradicate the parallel economy. This parallel economy consists the corruption, black money, illegal trading, terrorism, narcotics, and other anti-social and criminal activities. This is a very good step for the country in short term and long term. In short term, it will break down the existing chain of parallel economy immediately and in long term size of Indian economy will grow.

Indian Guar gum industry is facing problem of speculations and illegal trading due to black economy. Every honest stack holder is facing problem in Indian Gaur gum industry from farmers to exporters. They don’t know what will be next move in their business. In the morning prices goes up sharply and in the evening prices goes down drastically. A lot of black money has invested in trading, stocking of Gaur seed. These greedy traders/stockist/ exporters gives the movement to prices as per their profit. 



Guar farmers and Demonetization.

Farmers is the first point of guar trade. He produces guar seed with expectations of good prices but at the time of harvesting he could not able to recover his cost of cultivation. How is it possible? When farmer carry his produce in the market greedy stockist increase the parallel supply of seed in market and farmer is forced to sell his guar at lower prices. If there will be no black money, then it will not be possible to increase the parallel supply and farmer will get the real value of his produce. 

At the time of guar crop sowing these illegal traders / stockist increases the demand and farmers are forced to buy guar seed at higher prices. 

Some traders procure guar seed parallel by offering the extra payment and ditching the local mandi taxes. This farm incomes remain hidden. After demonetization, parallel buying will stop and funds will be transferred to farmer’s account after paying the mandi taxes. Transactions will be transparent. It is noticed if farmers ask for transparent transactions then these traders deduct the mandi taxes from the farmers’ payment. 

Sometime traders don’t give payment on time. Some traders don’t give sale slips to farmers, it becomes very problematic for farmers to prove the source of their income to banks to get the loans. Traders purchases commodity with 30 % payment and rest of payment is made after 20-30 Days or more.


Traders purchase commodities from farmers at the time of low prices/ over supply but these traders show this buying at the time of high prices to minimize their profit or to show the losses. By the paying the 2% Mandi taxes they by passes the income taxes.  The income of local agriculture market doesn’t increase and marketing infrastructure is not developed. These transactions will be come in accounts and farmer income will be documented and farmers can get more loan from banks. Credit worthiness of farmers will increase slowly and slowly. Farmers will easily  get loan for other activities like personal loans, home loan, vehicle loans, entrepreneur loans, education loan. 

Income of local agriculture market will increase and Govt can develop more market infrastructure. Farmers will benefit from it. Sometime farmers produce destroys due to poor infrastructure specially in the rainfall. Sometime buying of agriculture commodities is shown in another state. Mandi income & economic opportunities moves to another state.  This trend can be seen in Rajasthan at the boarder of Haryana and Gujarat.

Guar Traders and Demonetization.

Honest traders face many problems due to black economy some time they can’t get enough margin due to surrounding black economy. Local traders of guar growing area keep waiting for arrival. Commodities reaches to another market by passing the local economy and traders. Black money comes from another market and it destroy the business of local traders. Local employment, trading, stocking, processing, tax earning move to another location.
Black economy also lead to circular trading. In the circular trading business of local traders is affected negatively. Traders are forced to buy the commodities at higher prices. These circular traders withdraw draw their investments, swap the profit, and dump the commodities in market. Sometime this back money doesn’t let the prices goes up even in low productions even the fix costs of commodities trading keep increasing. 

After demonetization transactions will come in account books and no one can enter with white money in this way. Investment of traders will be secure and their margin and profit will be secure.  They can generate more income with local value addition related to grading, ware housing. processing and transportation.



Guar seed processors.

Existing guar processors faces a lot of problem with black money. Sometime new processors enter in market with black money and started to work with loss or zero margin and it affects the trade of existing processors. They started to offer finished products with lower prices than purchase prices of guar seeds. Income generation cycles of existing honest processors break down and it require extra cost to start there processing or keep it running.

After a certain time, these greedy processors started adulteration and decrease quality of product and it draw negative picture of the local processors in international market. Sometime complete consignment faces problem due to one or two containers. Sometime raw material is swap from the market with black money and supply of raw material becomes very tight it effects the margin of processors.

These greedy processors also disturb trained human resources by offering them higher packages and more facilities for short term. Existing processors faces a lot of problem with vacuum of trained employees. After demonetization, existing processors will get raw material locally and they can plan for long term sustainable profits/margins. 

At this times guar processing activities is focused in three four locations in India it will diversify with availability of the raw material.  Processors can invest in R& D in guar products. There will be no fear of the sudden loss in business.



Commodities exchanges

Commodity exchange were established to provide fair business activities platform to farmers, traders, and exporters but black economy promotes the Dubba Trading / Illegal commodity exchange. Dubba trading influence the physical market.  Sometimes operators of these illegal exchanges create artificial situations of the oversupply and shortage to draw their profit. Prices become unstable in real exchanges investors makes a lot of losses.

Guar gum Exporters

Sometimes new exporters enter in market with back money and start to export of guar gum at lower prices than market prices. It cut down the margins of existing honest exporters. Sometimes these types of exporters open another company in importing nation and keep exporting material at lower prices. They earn margin in importing country it forces to existing local exporters to export the commodity at no margin or loss. Buyer base of existing customers also shift to new exporters.  Generally, exporters get long term orders but with these practices buyers starter to give small orders as material is available in importing country with cash and carry system.



In conclusion guar gum industry, a lot of speculations and prices keep fluctuating regularly. With small influence of black money complete industry is facing the problem. Demonetization will eradicate the black money and activities related to illegal trading, hoarding, adulteration will come down and complete industry will come in profit.  All the stack holders of guar industry will benefit from the demonetization. It will lead to long term sustainable profitable margins.

Friday, 28 October 2016

Guar Prices will remain under pressure during next 10-15 Days

Business activities are sluggish there is poor demand due to on-going Diwali celebrations. Arrival is also low in markets there is no more supply pressure. Most of business activities like arrival, transportation, processing and export will be muted. Business activities will be resume after 3rd November. Crude oil prices are under pressure. These are trading below USD 50/barrel.

Processing activities will be remained low during next 10-15 Days. There is arrival of 65000 Bags per day. Arrival is not increasing due to lower production. Over all business activities will be remained slow during next 8-10 Days. There will supply pressure and impact of poor demand.