Fall in production is attributed to the fall in overall acreage under guar crop, particularly in Rajasthan. With this reduced acreage, India, still would have produced enough (7,00,000 tons) to cater domestic and international demand but non realisation of normal yield has (i.e. realisation of yield levels of 2-3 quintals per hectare instead of normal yield levels of 5-7 qts,/hac), further diminished the realisable production to peg it at 5,00,000 tonnes.
India consumes nearly 6 lakh tonnes of guar and its derivatives such as gum and splits. Due to reduction in the crop output, the prices of guar are likely to move up in the coming months. However, India still carries nearly 1.5-2 lakh tonnes of guar seed from previous years crop thus making total availability sufficient to meet the domestic demand. This may keep the prices under check from running high.
Accordingly, guar price is expected to range between Rs 14-17/kg, during months of November and December 2005. For months of January and to mid of February, however, due to harvesting of crop, supply pressure may marginally depress the prices to Rs13- 16/kg.
India has already exported 60% of the financial year demand. The remaining 25% of export demand is expected to be catered to during the months of January and February 2006. Rest 15% of the exports are likely to take place in March 2006. Since harvesting would be on verge of completion during month of March 2006 and demand pressure would still be lingering in the market, price may shoot up during March 2006, to quote at Rs 16 -20/kg.