Guar Gum Price Trend and Forecast

Regional Price Overview

Get the latest insights on price movement and trend analysis of Guar Gum in different regions across the world (Asia, Europe, North America, Latin America, and the Middle East & Africa).

Guar Gum Price Trend for the Q1 of 2024

Guar Gum is directly sourced from guar seeds by dehusking, hydrating, milling, and screening them. So, the price trends for the two are usually very closely aligned with each other. India is one of the major exporters of guar gum as the agrarian nation is the biggest producer of the guar crop. Gum is mostly exported in the powder format. During the first three months of 2024, the guar gum’s market performance was pretty mixed.

After a good run of the previous quarter, the guar gum prices had a humble run at the beginning of the first quarter in January. Overflowing inventories pushed the price trend downwards as the existing stocks were well capable of supporting the incoming demands during the initial days. However, as time progressed, the guar gum prices started to increase steadily. The Government of India raised the existing budget allocated for agriculture and farmers by 2000 cr INR; which is expected to further reflect positively on the Guar Gum’s market performance.

Analyst Insight

According to Procurement Resource, given the current queries and export scenarios, the Guar Gum price trends are expected to continue rising in the near future as well.

Guar Gum Price Trend for the October - December of 2023

The price trend for Guar Gum recorded a downward trajectory during the fourth quarter of 2023 as opposed to the anticipated incline in market prices. The prices initially inclined during the August-September months as the suppliers actively hoarded the contents in anticipation of adverse weather conditions leading to crop failures and decreased yields. However, with the coming of the October-November harvest season, no crop failures owing to severe weather conditions were seen, and a fairly good harvest was recorded.

The arrival of new products in the market caused the suppliers to release the hoarded stocks in order to cushion their profits, thereby decreasing the overall guar gum prices in the Indian market. Since India is the biggest producer and exporter of guar seeds, the declining market trend affected the pricing fundamentals in the European and US markets, too. Further, the reduction in the number of oil rigs in the US caused the demand to dwindle, thereby affecting the guar gum prices.

In comparison with the historical figures, the guar gum prices remained subdued for most of 2023 as compared to the previous years. However, this narrative is expected to change in the coming year due to the decreased volume of carry-forward stocks. In the 2023 Kharif season, the acreage of guar seeds went from 3.1mlh to 2.8mlh in Rajasthan (the top producing state) while it declined from 104,040 ha to around 95,250 ha in Gujarat. This decline was attributed to the excess rainfall during September, which damaged the crops. Hence, the low carry forward stocks coupled with rising demand will likely positively influence the guar gum prices in the coming year.

Analyst Insight

According to Procurement Resource, the price trend for Guar Gum are expected to incline in the coming months, given the rising demands from the US and European markets. The lowering interest rates coupled with the increased demands for protein rich guar meal from the importing nations will likely drive the export volume for India and positively influence the pricing fundamentals.

Guar Gum Price Trend for July-September of 2023

Guar gum, derived from guar beans, is a versatile industrial ingredient with widespread applications. Its primary use lies in the food industry as a thickening and stabilizing agent, enhancing texture and shelf life. Additionally, guar gum finds extensive utility in various industrial sectors, including paper manufacturing, textile processing, and oil and gas extraction.

Thus, its price trajectory is dictated by the combined result of the market activities of guar seeds and their industrial applications. In the third quarter of 2023, the guar gum price trend experienced a significant decline with the decline in guar seed prices. This was linked to an increase in supplies from growing regions. The fall in the guar gum price trend was also influenced by destocking activities adopted by the traders amid weak market conditions, which was further escalated by the slackened demand and ample supplies from growing regions.

Analyst Insight

According to Procurement Resource, the price of Guar Gum is estimated to decline in the upcoming quarters as the demand is muted while the supply is excessive.

Guar Gum Price Trend for the First Half of 2023

Asia

During the first quarter of the year 2023, significant improvement was observed in Guar Gum market trend as the prices rose, driven by inclined demands from the food and beverage sectors. Demands rosea suppliers increased their procurement to maintain the market flow owing to the impending Lunar New Year Holidays in China. But as the quarters changed, the price trend reversed, and the momentum shifted downwards. The consumer demands didn’t grow after a certain point, and the product overflow forced the suppliers to discount the prices in order to vacate the stockpiles.

Europe

H1’23 began with excess inventory stocks since the market offtakes were very limited, and the feeble query count didn’t promise any improvements in the nearsighted future. The price trend were set on a declining trajectory and fluctuated at the lower end of the price graph. A considerable slip in production costs also facilitated this fall in Guar Gum prices. As the crude oil and energy prices started stabilizing in the struggling European markets, the upstream processing got cheaper, which took away the crucial cost support. Overall, declining market sentiments were experienced.

North America

The North American Guar Gum market almost replicated the European market trend. The general trend was declining with lower demands from the consumption sector. However, the end of the second quarter saw some reverse fluctuations as the prices showed some positive movement since the inventories started vacating.

Analyst Insight

According to Procurement Resource, with the variations in Guar Gum prices across the different markets globally, the prices are likely to continue fluctuating going forward.

Guar Gum Price Trend for the Second Half of 2022

Asia

Guar Gum is sourced from Guar seeds and has multiple applications across various industries like food, beverage, pharmaceuticals, cosmetics, personal care, etc. During the second half of 2022, the Guar Gum prices oscillated in the Asian region. After starting slowly at the beginning of the third quarter, the market gained some momentum in the second half of Q3’22. However, as the quarters shifted, the prices started declining again, riddled by significantly low demands. A setback to the Chinese industries by the long and strict Covid containment lockdown led to this decline in demands. Overall, market sentiments were muted for the majority of the discussed period.

Europe

The European Guar Gum markets experienced mixed price trend throughout the said period. The prices rose in the third quarter, influenced by the heightened inflation in the region caused by the curtailed Russian oil supplies. But as the year-end arrived and the quarters shifted, the market momentum also got reversed. Owing to the market’s instability, the consuming sector struggled and hesitated to procure more products; hence, the prices slipped during the fourth quarter.

North America

On the contrary, Guar Gum prices remained on an inclined trajectory for the entire discussed period. Even though the upward fluctuations were within a limited range, the overall market sentiments were very positive, with a healthy supply and demand dynamic.

Analyst Insight

According to Procurement Resource, with the given variation in Guar Gum market trend, the prices are likely to fluctuate in the coming months as well.

Guar Gum Price Trend for the First Half of 2022

Asia

The market for guar gum showed an irregular pricing trajectory in the first quarter of 2022. At the beginning of the first half of Q1, prices indicated steady market sentiments with the supply and demand sides in balance. With the start of the pandemic later in the second half, prices of guar gum displayed mixed emotions.

The market for guar gum displayed an increased price trajectory in the second quarter of 2022. The end-user industries later encountered stronger demand with constrained supplies toward the conclusion of the second half, which influenced prices. Guar gum prices were seen to reach 147400 USD/MT Ex-Jodhpur (India) at the end of Q2.

Europe

The price trend for Guar gum were constant throughout the first quarter of 2022 with mildly operating supply and demand factors. Prices were lower at the start of Q1 because there was less demand than there was supply. However, as the second half got underway, the epidemic started to make a comeback, which led to a spike in the price of Gaur gum on both the domestic and international markets. Prices were listed as being 2235 USD/MT CFR Hamburg at the end of Q1.

The prices were closely correlated with supply and demand in the second quarter of 2022. Strong demand and high offtakes compared to supply at the start of Q2 led to higher prices. Prices of guar gum were recorded as 2656 USD/MT FD Rotterdam at the end of Q2.

North America

The price trend for guar gum showed an upward trajectory with minor fluctuations in the first quarter of 2022. Prices were on the lower end at the start of Q1 since there was less supply due to stocked-up stocks than there was demand.

As the pandemic reemerged later in the first quarter, production fell, consumption increased, and carryover stock decreased when compared to the previous quarter. The general price trajectory was seen to be on the higher side at the end of Q1. 

Guar gum prices showed an upward price trajectory with minor fluctuations in the second quarter of 2022 averaging 2856 USD/MT CFR New Orleans.

For the Fourth Quarter of 2021

Asia

In the second week of December, its futures fell in tandem with crude oil futures prices. The December futures were traded at 10,110 USD, down 2.54% from the previous close of 10,373 USD on the National Commodities and Derivatives Exchange (NCDEX). Because guar gum is utilised in oil extraction, its price drops as crude oil prices decline.

For First, Second and Third Quarters of 2021

Asia

Guar gum prices declined by 59 INR to 6,137 INR/five quintal in the last week of January, as dealers offloaded their positions in response to a negative trend in the spot market. The prices in February dropped by 59 INR, or 0.95%, to 6,137 INR/five quintal on the National Commodity and Derivatives Exchange.

Guar gum prices rose about 20% in August, driven by demand for guar meal from the poultry and animal feed industries, as well as concerns about a reduction in crop yield due to a lack of rain in western Rajasthan, the key growing region for guar seeds.

September futures price declined 517 INR to 9,080 INR/five quintal, as dealers sold their positions in response to the negative spot market trend.

For the Year 2020

Asia

Throughout 2020, guar split price was stable with little fluctuations. The price volatility was caused by speculation about the crop size for this year's Kharif season, crude oil prices, the international demand situation, and the supply of guar in local markets based on the arrival of the fresh crop from this season. In October, the average price was 62.125 INR/kg (0.854 USD/kg). Guar gum prices were erratic due to their reliance on exports.

The prices had been relatively steady in the range of 53-68 INR/kg since June 2020. Because the area sown under guar during the 2020 kharif season was lower than the previous year, and as farmers chose cultivating other crops because prices were lower, new guar crop production was predicted to be lower than the previous year's crop.

In addition, the industry had a large carry forward stock. Guar Gum is primarily used by the oil drilling sector, which had been severely impacted by the pandemic. As a result, natural gums were used in a wide range of food applications.

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