Guar gum prices have risen 70 per cent since October due to strong export demand. Prices jumped 70 per cent to Rs 8,200 a quintal from Rs 4,838.1 a quintal, which existed on October 1, 2010.
Prices of Guar seed also rose 35 per cent to Rs 2,762.7 a quintal from Rs 2,002.9 a quintal.
Demand for Guar gum has risen considerably due to the strong demand from the oil expolartion industry, said Vineeta Advani, an analyst with Ventura Commodities.
Gum is used as an adhesive during oil exploration. It is also used by the food and textile industry.
Pakistan, Sudan and India are the only countries that produce Guar gum. Guar seed is the basic raw material that is required for producing it.
Due to the floods in Pakistan, a large portion of the crop got damaged, and political tension in Sudan made it difficult for importers to import Guar gum from there; thus leaving India as the only dependable option.
The year's carry-over stock of 2.5 lakh tonnes, was the lowest in ten years, Biren Vakil said.
Also, the market is rediscovering the price of Guar gum, which is also pushing the prices of this commodity higher.
According to the market insiders, the Guar prices have surged due to factors like increased demand and reduced arrivals in manids.
“Currently arrival is very thin at 5-10 bags (a bag = 100 kg). The demand is constantly rising and the supply is limited mainly due to untimely rains in November-December,” said an official at the agricultural product marketing committee at Himmatnagar.
The Guar prices are ruling at Rs 450 -500 per 20 kg, which is up by at least Rs 50 per 20 kg during the past 15 days. In Gujarat, Guar trading is seen mostly in APMCs located in Talod, Prantij and Himmatnagar in Sabar Kantha district of the state. Market insiders feel a further rise in prices as arrivals at the mandis continue to remain low and demand has been rising constantly.
(With inputs from Ahmadabad)
