The Guar market continues to remain firm with prices increasing since the beginning of February 2017. Stockists reluctance to sell and continued demand are impacting prices
Guar seeds are not freely available, high demand from powder manufacturers is incentivising stockists to limit supply. If the manufacturers require larger quantities the seeds have to be purchased in stages. Stockists are averse to sell seeds in a rising market for fear of selling too low.
Manufacturers, stockists, and brokers are eagerly awaiting the April monsoon reports from the Indian Meteorological Department (IMD). If the reports are positive, stockists might be more inclined to liquidate, however, if the IMD indicates rainfall deficit, supplies could further tighten.
Guar demand is predominantly from the U.S and Russian Oil and Gas industry. Many forward bookings were done below $1500.00 PMT FOB. Technical and food customers in Europe continue to provide steadily increasing demand. Exports increased in March and the price remained the cheapest in comparison to alternative hydrocolloids which is contributing to the increased demand. over the previous three months the dollar devalued by 4% against the Indian Rupee, this increased the prices as the powder manufacturers made adjustments to factor this in.
If Guar Gum supplies stay tight and the demand continues to increase, the prices will remain firm. Monsoon reports, oil prices, and dedicated acreage will provide some indication of the direction in the coming months.