Guar Seed and Guar Gum prices weakened due to stagnant demand at current price level.

Today, Guar seed and guar gum prices have weakened due to stagnant demand at the current price level. Demand is poor at the current price level. Guar seed and gum prices were quoted weak in the physical and forward markets due to stagnant demand at lower levels. The current prices are not supporting the buying of Guar seed and guar gum in the market. Currently, there are parliamentary elections in India, and business activities are slow, awaiting the formation of a new government.

Most processing industries are waiting for big orders. Generally, major demand arises from the US, but this year the major demand for guar products is coming from Norway and the Netherlands. The Norwegian government has awarded 62 new licenses for oil drilling to 24 energy companies, a significant development. As of today, Norway is experiencing the highest hydrocarbon extraction of the last 15 years. Equinor is investing USD 6 billion per year in oil and natural gas exploration and drilling activities in Norway. Currently, Equinor is working on 55 new projects. Russia and Norway are major natural gas suppliers to Europe. After 2022, Norway became the number one oil supplier to Europe after surpassing Russia.

 
Guar Seed and Guar Gum prices weakened due to stagnant demand at current price level.

After Norway, the Netherlands, USA, Germany, Russia, UK, and Australia are major importers of guar gum from India. Norway has imported 75,850 MT, the Netherlands has imported 39,040 MT, the USA has imported 35,835 MT, Germany has imported 28,393 MT, Russia has imported 27,954 MT, the UK has imported 13,605 MT, and Australia has imported 11,650 MT of guar gum from April 2023 to December 2023. Oil drilling activities are a major booster for Guar seed and guar gum demand and further price movement.

This is a critical time for the entire guar gum industry. The guar gum industry should take collective action for the standardization of the quality and grading of guar gum. Guar-based products are increasing day by day. Guar-based dietary fiber is already on the market. Now people are working on extracting guar protein for human consumption. Quality control is necessary with the increasing number of guar-based products. There are many non-tariff trade barriers in the guar business. The industry must work to remove these barriers.

Due to increased demand and lower production, crude oil prices are also increasing. The global market is bullish for crude prices in the current quarter. Currently, Brent crude oil is being traded at USD 85.95 per barrel, and WTI crude oil is being traded at USD 81.68 per barrel. OPEC anticipates a substantial surge in global demand for liquid fuel in 2024, reaching 2.25 Mb/d, followed by a continued increase to 1.85 Mb/d in 2025. The projection for future growth in US tight oil output remains steady compared to the previous month, with an expected uptick of approximately 4% in 2024 and a subsequent 5% rise in 2025.

Guar seed and guar gum prices are weak in the local physical markets. Prices of Guar seed and guar gum are quoted lower than the commodity exchange NCDEX. Future trading of Guar seed and guar gum is also expected to remain poor due to no business at current levels. Good quality Guar seed is traded at Rs 5200 per 100 kg, and average quality Guar seed is traded at Rs 4800 per 100 kg. Standard quality guar gum is traded at Rs 10100 per 100 kg. In interior locations, Guar seed is traded up to Rs 4700-4800 per 100 kg. Guar seed is being traded strongly in the future market. At NCDEX (National Commodity & Derivatives Exchange Ltd), Guar seed-10MT is traded at Rs 5185 and Rs 5260, lower by 0.38 percent or Rs 20 per 100 kg and 0.17 percent or Rs 9 per 100 kg, with an open interest of 68965 and 16120 for April and May month contracts.

Guar gum is also traded weakly in the future market. At NCDEX (National Commodity & Derivatives Exchange Ltd), Guar gum-5MT is traded at Rs 10130 and Rs 10090, lower by 0.26 percent or Rs 26 per 100 kg and 0.25 percent or Rs 26 per 100 kg, with an open interest of 41020 and 7885 for April and May month contracts.