Why are Guar gum prices not getting support from strong crude oil price ?

Currently crude oil prices are strong in international market due to increasing conflict between Iran and USA. In recent development USA has put strict restrictions on buying of crude oil from IRAN. Supply of crude oil has become tight with current geopolitics over Venezuela and Iran. Currently crude oil is being traded around USD 72/ Barrel. There are possibilities that crude oil prices may go up further with increasing tension in oil producing regions.

Even though crude oil prices and export of guar gum both are increasing but Guar gum and guar seed prices are not getting enough support from these two positive factors. Export of Guar products is shifting from Guar gum to Guar korma. Increasing Guar korma export is good for gaur industry to support guar prices at lower side, but export of Guar gum is very important to keep the prices strong at upper side.

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Indian gaur gum exporters are focused only on demand from oil and natural gas industry. Demand from oil and natural gas industry is highly competitive and volatile. Exporter must focus on demand from other than oil and natural gas industry. Demand from oil and natural gas industry in becoming very risky for whole Guar gum industry. Food and industrial demand is very important. It is stable and long term.

Now guar prices will keep roaming between INR 4000-5000/100Kg . Strong demand of Guar korma will not let the guar prices fall below INR 4000/Kg. Sluggish demand of guar gum from oil and natural gas industry will not let it go higher than INR 5000/100 Kg. This will remain primary limit till new crop will arrive in market in Nobember-2019. Fresh sowing of Guar crop and arrival of monsoon will set new limit of price movement. Even in worst case guar prices will not go below 4000/100Kg at lower side. 

Since there is no any other alternate crop to guar in rain fed area so guar sowing area will not fall freely. Farmers will go for Guar cultivation in rain fed area. If water will available in irrigation canal in sufficient quantity then farmers will go for cotton crop in irrigated area. Otherwise farmer may do the sowing of guar in irrigated area. 

Few multinational companies are collecting data from farmer and guar growing area in pretext to doing CSR project on Guar. These companies are end user of the guar gum in bulk quantity. These companies are using these data to run the guar busindustry with the help of their Indian partners. In next step these companies will force farmers to sell their produce as per profit and loss of the company. Farmers must keep themselves away from these companies in long term.

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