Guar gum exports would remain firm owing to an increase in demand from the international oil sector, market sources said. If the country witnesses adequate production in the ensuing crop season 2011-12, the exports is expected to touch 3.5 lakh tonne, they noted. The rise in crude oil prices and lower supplies from Pakistan, the second largest guar producing country next only to India, will push up guargum exports from the country. The export from Pakistan declined as the crop got destroyed due to floods last season.
According to the Agriculture and Processed Food Products Export Development Authority (APEDA), guar gum exports surged by 82% to 2.79 lakh tonne in April-December 2010 from 1.53 tonne in the same period a year ago. Total exports for the entire financial year 2009-10 stood at 2.18 lakh tonne.
Looking at this trend, Vedika Narvekar, an analyst with Mumbai-based broking firm Angel Commodities, said the estimated exports for the financial year ending March 2011 would touch 3 lakh tonne. She said the demand for the commodity increased in the international market due to increase in demand for the commodity from the oil producing companies. Guar gum is used as a lubricant in exploration wells and also used for fracturing oil wells.
?A record export during 2010-11 is the only factor that is supporting the bullish trend in guar complex in the current crop season (October 2010-11),? she noted.
The crop year 2009-10 witnessed 35 lakh bag (100 kg per bag) of guar seed output while it more than trebled to 150 lakh bags in 2010-11 due to favourable monsoon. The guar production is completely dependent on the monsoon. A slight difference in the monsoon pattern may cause a big change in the output, she added.
The recent long range forecast by the Indian Meteorological Department (IMD) for the 2011 south-west monsoon season predicted that the rainfall for the country as a whole is most likely to be normal (96-104% of Long Period Average or LPA). There is very low probability of season rainfall to be deficient or excess.
But forecast for guar production for 2011-12 could be ascertained only in June, when IMD releases its second stage monsoon forecast, market participants added. Thus, guar price movement would be dependent on export demand as long as monsoon forecast remains favourable. Prices are expected to trade in the range of R3,075-3,300 per quintal in the medium-term, said Angel?s report. On Friday, the spot guargum price stood at R9,184 per quintal and guar seed at R3,080 in Bikaner market.