Guar gum exports in 2013-14 stood at Rs 11,734 crore with 48 % increase by volume

India Govt's organization has released the data of export of agricultural commodities from India. growth rate has been slow down from 24 .10% of last year t to 15.70 %  of this year. Guar gum powder export has emerged as major reason for slow down of  the agriculture export rate.

In 2013-14, India exported agriculture farm goods worth Rs 2,68,477 crore as against Rs 2,32,041 crore in 2012-13. In 2011-12, India had exported farm products worth Rs 1,86,970 crore.

The major reason behind decrease in guar gum export was the rate of guar gum . The rate of guar gum was remained steady throughout the year 2013-14. The average rate of guar gum seeds was INR 5000/ 100 Kg. 

It is noticed that the  there is sharp increase in volume in comparison to last year.  There volume wise it has increased 48 %  last year  there was decrease of 42.5 % . overall we can say by volume wise the export of guar gum has increase. 

This year it is expected that teh volume will increase as the carry forward of stock in international destination has come down. If the monsoon will normal or at a deviation up to 20 % then there will no any significant change in rate. The existing carry forward of farmers stock will  come out for sell in this year.   

Guar gum Export data of previous year 

1. Year 2010-11       - Value INR    2,93,869.89  Lacs  or    2,938 Crore      Volume 4,41,607 MT
2. Year 2011-12       - Value INR  16,52,386.70  Lacs  or  16,523 Crore      Volume 7,07,326 MT
3. Year 2012-13       - Value INR  21,28,701.07  Lacs  or  21,287 Crore      Volume 4,06,311 MT
4. Year 2013-14       - Value INR  11,73,452.54  Lacs  or  11,734 Crore      Volume 6,01,945  MT

Guar Gum Exports Data From India 2013 - 2014

Guar Gum Exports Data From India  

		Year 2013-14
Sr No.	Country	Quantity ( MT)	Value (Rs in Lacs)
1	U S A	3,32,247.36	8,52,871.81
2	China P Rp	56,968.17	96,789.37
3	Germany	16,956.65	33,222.12
4	Russia	10,970.50	30,067.14
5	Canada	8,736.38	22,132.47
6	Italy	21,296.95	16,452.29
7	Netherland	3,731.58	8,650.00
8	Brazil	3,096.09	8,568.22
9	Egypt A Rp	29,454.03	7,258.57
10	Indonesia	12,681.17	6,811.05
11	U K	3,211.47	6,522.05
12	Argentina	2,328.24	6,051.80
13	Japan	2,842.25	5,733.91
14	U Arab Emts	2,300.65	5,156.83
15	Latvia	10,905.60	4,391.95
16	Australia	1,721.70	4,136.18
17	Malaysia	12,913.39	3,959.98
18	Turkey	8,656.84	3,888.93
19	Switzerland	1,621.00	3,403.33
20	South Africa	1,593.00	3,382.73

Expectation of normal guar seed crop production in 2014-2015 and Guar Seed & Guar Gum Prices in 2014-2015

Expectation of Normal crop

Recovery in Monsoon will lead to a normal guar seed crop in year 2014-2015  as  per current climatic condition. Rain fall is good in Guar growing belt. Early sown crop will be befit from it and  will recover from drought condition. New crop will start to come in market after mid of October. Delay in monsoon has increased Guar sowing in irrigated area. Irrigated area work as a insurance of good production for Guar Crop. At other side late rainfall  increased the late sowing in  rainfed area of Chrur, Hanumangarh, Ganganagar, Bikaner, Jodhpur, Nagor and Jaisalmer. 

Initial delay in monsoon weakened the guar seed crop production.but it improved significantly. Shadow of poor monsoon will effect the production of  guar seed but it will not effect the business of guar seed and guar gum. If monsoon keeps going as it is right now , then it is expected that in this year 2014-2015 , there will be production of 18,00,000 MT  (18 Millions Bags of 100 Kg. each) ) of Guar seed.  Though this production is not sufficient to cover the  expected  total demand of year 2014-2015 but  carry forward stock of last year will make it surplus amount to fall in the price of guar seed and guar gum in year remaining period of  year 2014-2015 .

Low Fracking activities in Winter Period and Guar Seed & Guar Gum Prices in 2014-2015

Low Fracking activities in Winter Period 

Winter time will start after two months. In the winter month the new fracking activities will come down. because oil and gas  company will start to work on production of Gas as the energy requirement will be increased in most of developed countries. Halt is fracking activity will not lead to any major new contract or demand of guar gum . Existing contract of guar will keep going. Mostly frackign activity is completed during the summer period. Low frackign activity will keep pressure during the remaining period of 2014-2015 up to march. In the next 6-8 months the demand of guar guar seed and guar gum will come down.

Availability of guar seed after Fresh harvest of Guar crop in 2014-15 and Guar Seed & Guar Gum Prices in 2014-2015

Availability of guar seed after Fresh harvest of Guar crop in 2014-15 

After two- three months guar seed arrival will increase in market. October - November will be harvesting period and there will be peak arrival for next three -four months. This arrival will lead to over supply and guar price will further come down.  Generally big farmers go for regular stocking of guar seed  for wait  and watch behavior, but small farmer will keep pressure of availability in market. The fresh arrival liquidity of guar seed will keep pressure in the period of October to February- 2015. Availability of fresh guar seed will saturate market. Guar seed and Guar gum prices will be under pressure for coming next 6-8 months of current financial year 2014-2015

Improvement in Manson and Guar Seed & Guar Gum Prices in 2014-2015

Last month it was seen decline in price of guar seed and guar gum.  Condition will be remain under pressure up to next six months. The use of guar gum and its derivatives will come down in next six months. 

The improvement in the mansoon is major factor to keep the prices under control up to next 6-8 months.  Fear of poor monsoon has gone away from the mood of farmer, trader and the processor. The improved Monsoon will support farmer as it will keep his farm expenses lower. The arrival of other commodities will also increase the  business of trader and processor, The profit from other commodities will keep liquidity  in the market and there will be money in the hand of farmer, So there will be no major pressure of liquidity  on single  Guar seed commodity o. In this improved monsoon condition it is expected that  prices of Guar seed will be remain under pressure. Guar seed prices can come in the bracket of 3500-4500 in year 2014 - 2015. 

Carry forward Stock of Guar seed for 2014-2015 and Guar Seed & Guar Gum Prices in 2014-2015

Carry forward stock guar stock for year 2014-2015 

The carry forward stock of guar seed is major aspect to decide guar seed and guar gum  price. Farmers and traders are still having huge stock of guar seed.  Last year price stability and decline was due to carry forward of huge guar stock of 2012.   As an rough calculation  there is 5,00,000 MT guar seed stock of 2013 and 5,00,000  MT guar seed  stock of 2012,  5,00,000 MT guar seed stock of 2011 and before that. So total tally of carry forward guar seed stock is around. 15,00,000 MT. The available stock of guar seed for year 2014-15 will be around 30,00,000 MT.  The estimated consumption of guar seed  in (Year 2014-15) can be in between 22,00,000 MT - 25,00,000 MT. More or less 5,00,000 MT - to  8,00,000 MT buffer Guar seed stock will keep pressure on guar prices in year 2014 - 2015. If  price of guar seed go below the bracket of 3500-4000, then there is chances of  increase in consumption. In that case price consumption can cross the limit of 25,00,000 MT guar gum seed in year 2014-2015. But it is only possible if price of guar seed go below INR 3500/ 100 Kg. Till this consumption there will be pressure of carry forward Guar Seed Stock.

Sanctions on Russia by western world and Guar Seed & Guar Gum Prices in 2014-2015

Sanctions on Russia by western world 

Sanctions on Russia will also keep pressure on Russia to lower the prices of Natural Gas.  Low natural gas prices will keep pressure on  International Energy prices. This effect will further transmitted to guar gum and guar seed prices. It was expected that fracking activities was suppose to increase in Russia , but the technology is laying with American Companies and sanctions will keep them away from Russia. A huge quantity was suppose to be used in Russian oil field by american companies. Now there is no chances of further progress in this issue in coming next 12-18 months. Guar seed and guar gum prices will be under pressure due to these sanctions on Russia.

Civil war is in Middle east, in Syria, Libya Lebanan, and Iraq and Guar Seed & Guar Gum Prices in 2014-2015

Civil war is in Middle east,  in Syria, Libya and Iraq :-

The civil war condition will keep in position of uncertainty to investors.So there will be no major investment in Syria, Iraq and Libya. Civil war condition will also keep pressure on these groups to sell more and more crude oil to earn money. All other source of employment has been crashed. Oil will be only exchangeable commodity for these fighting groups. Low rate of crude oil in international market will prohibit new investment in oil and natural gas sector.Means there will be no requirement of guar gum powder for new exploration. Current political crises in these countries will keep pressure on Guar seed and Guar Gum prices.

Low consumption of Ice cream cream and other summer food & beverage

Low consumption of Ice cream and other summer food and beverage :-  A lot of guar gum powder is used in ice cream and other summer food and beverages . Consumption of ice cream and other frozen food will come down during next 6-8 months, so  demand of guar gum powder will come down from domestic and international food industry during the remaining period of 2014-2015. The rate of guar gum will under pressure from the food industry. 

Guar Seed &Guar Gum may become hot commodity, If demand rises from other than Oil &Natural Gas industry

During this week Guar Guar gum seed and Guar gum prices are improving slowly and slowly in future market as well as in spot market. If we analyse the entire factors we will find that things are not in favor of prices rise. First time in history there are crude oil inventory crises in USA. There is over production of crude in USA. This over production is continuing means there is not storage available for new production. In coming future crude prices may crash to a new lower level of this year. Demand of new guar is not so hot. Existing contract may keep going but there are lesser chances of further demand rise. 

At Supply side there is sufficient production and there can be a carry forward of 15’000’000 Qt Guar seed (15 Million bags) for year 2015-2016 from year 2014-2015. In worst case scenario there is sufficient stock of guar seed to cover the demand of guar gum domestically and internationally. As per early data released by Govt we find that there will be good monsoon during this year. Cotton is parallel crop of guar, which is also not preforming well. 

During this year farmer will prefer Guar over cotton especially in irrigated area. International rating agencies are giving prediction of improvement in Indian economy. It will lead to Rupee strengthen against USD. If INR will strengthen then there will be low Rupees inflow.

Mature guar crop ready for harvest in Farm in Rajasthan 

There is hope from domestic consumption. At lower price, application of guar gum may increase in other industries. At low price Guar gum will be affordable for other industries. If total share of other industries  increase up 50 %, than oil and natural gas industry, then guar guar may become a hot commodity for long term basis. Guar meal and Guar Korma will also give a strong support to guar seed prices. Currently guar Korma and Guar Churi is preforming very well in comparison to last years and guar gum. Churi Korma will always work as base line for Guar seed price.

Advance estimate of Guar gum ( Guar seed) Crop production - Year 2014-2015 in Rajasthan is negative in comparison to last year.

As per advance estimate data of Guar gum ( Guar seed)  Crop production -  for year year 2014-2015 released by state government is totally negative and it show that there will be sharp decline in the guar production.

GUAR CULTIVATION AREA, PRODUCTION,  AND YIELD OF LAST FOUR YEAR- RAJASTHAN

S.N.              Year                  Area (Hectare)             Production (MT)              Yield (Kg/Hectare)

1                  2011-12                3'095'869                          1'847'713                                  597

2                  2012-13                4'526'368                         2'023'096                                447

3                  2013-14                5'071'099                         2'863'055                                 565

4                  2014-15                3'212'965                         1'339'806                                 417

                (* data of 2014-15 is on this basis of estimate Sourced from State Govt.)

All three factors Cultivation area, Production and productivity (Yield) of this year are lowest in last four year. These data are for Rajasthan State Only.

( CROP WISE ADVANCE ESTIMATE OF AREA, PRODUCTION AND YIELD - 2014-2015 

( Guar data  in red highlighted row ) 

In initial estimate of sowing area were showing positive pattern.  But first estimate of production is negative. There is 53 % drop in production as compare to last year. There is 36 % drop in cultivation area as compare to last year. There is 26 % fall in yield or productivity.

( LAST YEAR AREA, PRODUCTION AND YIELD OF DIFFERENT CROP-2013-2014 ) 

                                                                   ( Guar data  in red highlighted row ) 

Last Two year there was good sowing and bumper crop due to favourable climatic condition from first rainfall to maturity.  If we compare these data with 2011-12 then situation is normal. Year 2011-12 was normal in context to Guar production.

The final picture will come after harvesting and commodity arrival in market but initial picture is not good.

Final condition of guar seed ( Guar Gum ) crop after return of manson

Manson is over from most of guar growing belt.  There are minimum chances of any major rainfall. Guar gum ( seed ) crop conditions are clear now. In this year production will be normal there is no any news of major crop damage. In Haryana there can be some damage due to excessive rainfall, but that will be in the limit of 10%. Overall Haryana produce 20-22 % of total Indian guar production so the 0 % variation will be not more than 2 - 2.2 % of total production.

Some people can compare this year (14-15) production with last year year (13-14) production. Last year production was bumper in timely rainfall condition.  This year production of gaur will be above the normal.

There were drought conditions initially.  Sowing started very late.  This drought condition gave an option to farmers to grow guar instead of other water intensive crop like cotton, paddy in irrigated area of Haryana, Ganganagar, Hanumangarh and Bikaner.   In rain fed  area situation was in the same direction , farmers of Rain fed area  preferred Guar crop over the other crop like Bajara ( pear millet) , Moong (Green Gram) Moth .It is  

The late rainfall was sufficient for sowing. After sowing there was a long dry period, which was very critical condition but it saved guar crop from any disease and pest attack. In mid of cropping season rainfall was very low but it was on regular interval as per required. In this condition vegetative growth of plant didn’t effected too much.

 

Last rainfall was also normal.  It was heavy in some part especially in Haryana. In cotton growing area, due to heavy rainfall and regular irrigation there was condition of water logging and disease outbreak. But due to short rain fall period, it improved very fast.  There is news of minor damage against the fear of heavy damage. Guar crop affected least in adverse climatic conditions. Early sowing crop will be ready to harvest if weather conditions are clear with high temperature, the crop may mature within 10-15- days.

Late sowing crop way take time.  it may mature around last week of October especially in rain fed area. Crop is in good condition. Now there is no requirement of water or rainfall. Crop need clear weather and bit high temperature to mature timely.

Decrease in Crude oil price in International Market and Guar Seed & Guar Gum Prices in 2014-2015

In the Global market crude oil price are at  the lower level . On 4th august it was at six month low.  This price will effect the global energy price and that push  will further put pressure on guar gum prices.  The price fall doesn't give any sign of new investment in the Oil and Natural Gas Industry. Half of current financial has been passed , for the remaining financial year  this is last time for new guar gum demand.

Global  crude oil prices during last one month in USD 

( Source link  http://www.infomine.com/investment/metal-prices/crude-oil/1-month/  )

Currently  I am monitoring and analyzing that Guar rate are slowly going up. Investors are advised to keep away from market  this type of  abnormal behavior. as i have discussed earlier that there is no problem on supply side fro guar seed.  There are chances that speculators have again active in the market otherwise I am not seeing any reason  in increase in demand of guar gum and further price rise in this commodity, be cautious.

Global  crude oil prices during last one month in USD 
( Source link http://www.infomine.com/investment/metal-prices/crude-oil/6-month/ )

The global demand in oil and natural gas industry can lead toward increase in guar and guar gum prices. In another analysis it has found that oil and natural gas drilling / fracking companies has stoked guar gum for one year so that they can avoid themselves  from unnecessary price fluctuation. There can be minor effect due to USD / INR exchange rate, but the current exchange rate change is not sufficient to effect it. The existing contract will keep going there is low chances of new contracts in market.

Global  crude oil prices during last one year  in USD 
( Source link http://www.infomine.com/investment/metal-prices/crude-oil/1-year/ )