Indian traders have inked deals to export about 180,000 tonnes guargum in the current season that started October, of which about 80,000 tonnes gum has already been shipped out, Shreans Daga, managing director of Betul Oils Ltd, a leading guar gum exporter, said.
He said demand for Indian guargum is robust this year and total exports could cross 300,000 tonnes, way higher than about 220,000 tonnes exported in 2009-10 (October-September).
“Demand from the oil exploration sector is seen surging this year with a rise in crude oil prices. I think that will support higher exports,” Daga said.
India is the largest producer of guargum, and exports 60-70 per cent of its produce.
The oil exploration sector is a major demand driver for guargum, with the commodity being extensively used for fracturing of oil wells.
It is also used as a lubricant in drilling wells, besides finding wide application in industries like textiles, cosmetics, pharmaceuticals, food and paper.
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Daga said higher demand from the oil exploration sector alone could lead to a 30 per cent growth in guar gum exports this year. He said during the two years of global economic slowdown, there was a dip in demand for guargum from the drilling sector.
“During the recession, guar gum demand from this sector was almost at a standstill. Nobody was buying, as a result, the supplies with them were at a rock bottom,” Daga said.
He said with crude oil prices rising again, refiners and drillers have started building up gum inventories, and are expected to buy more than they immediately require. This expected rise in demand, coupled with tighter supplies this year, has already pushed up significantly guar seed prices in the local market over the last few months, and prices are expected to rise further.