Finance Update

guar: Guar surges on rise in crude oil rates

Aggarwal said orders have also increased from the food processing sector.

Mar 26, 2019, 08.50 AM IST

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He said future prices will depend on rains and crop planting, which will begin in summer.

New Delhi:

Guar

gum prices have risen by 6 per cent in the last three weeks on the back of an increase in demand from the oil exploration and

food processing

sectors in the West. Industry executives said exports of the commodity are likely to be higher in 2018-19 by10 per cent.

On Monday, guar gum was selling at Rs 89 a kg, up 5.5 per cent from the beginning of the month. “The demand for guar gum as a hydraulic fracturing agent in the past few months increased after crude oil prices started increasing from $45 a barrel in October to the current $62 a barrel. Demand will definitely pick up if oil prices keep increasing,” said BD Aggarwal, MD of Vikas WSP, a guar gum polymer maker.

Aggarwal said orders have also increased from the food processing sector. “We have signed a number of orders coming for newer guar gum food-grade products to be used in food and even e-cigarettes,” he said. The company is targeting a 30 per cent increase in turnover to Rs 800 crore for the year ending March 2019. Purushottam Hisaria, MD of Sunita Hyrdocolloids, said export of guar gum this fiscal is likely to be 10 per cent more than the previous year’s level.

He said future prices will depend on rains and crop planting, which will begin in summer. Analysts said rising crude oil prices and drop in arrivals of guar seeds in the physical market were the other reasons for guar gum futures to have shown an upward trend in March.

On the NCDEX, guar gum prices was being quoted at Rs 8,880 per 100 kg, said Anuj Gupta, deputy vice-president of commodity research at Angel Commodity. Guar seed prices have risen by almost 4.28 per cent from the beginning of this month due to arrivals in mandis being negligible, said traders. “The crop was short this year and arrivals are negligible, while demand is firming up. We expect prices to move from current rate of Rs 4,400 per 100 kg to Rs 6,400 per 100 kg in the next three months,” said Gautam Chand Jain of Gautam Trading Co in Mandore mandi of Jodhpur.

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Prakash Poojary
Business Analyst

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