Guar Crop 2015 Report

Hello everyone

We are writing to bring to you the First Round Report, or the “Dipstick Round”, of Guar seed estimation, commissioned by the nodal Indian Government Agency for Guar Gum export, SHEFEXIL, and carried out by The Nielsen Company.

The sample size for this report was 393 farmers (details given below)

Rajasthan	170
Haryana	60
Gujarat	60
Madhya Pradesh	40
Uttar Pradesh	38
Punjab	25

The first 3 states namely Rajasthan, Haryana and Gujarat (in that order) are the most important states for Guar cultivation. The perception of the farmers from these 3 states, about the 2015 crop, is that the crop is “Bad compared to last year”. This is specified on the last page of the report. Please click here to view the complete report.

However considering the initial estimates of the crop from this year, the carryover from last year and also the low demand from the shale oil industry in the US, it is quite clear that supply exceeds current demand significantly. See table below for further details.

	Bags (100 kg each)	Metric Ton
Guar Seed Crop 2015	15000000	1500000
Converting to Guar Splits		420000		A
Guar Seed carryover from 2014	5000000	500000
Converting to Guar Splits		140000		B
Guar Splits carryover from 2014		20000		C
Total Guar Splits available in MT		580000		A+B+C
Total Guar Splits available in MM LBS		1279

The yield from splits to powder is dependent on the type of Guar Gum being produced. However considering an average yield of 93%, Guar Gum powder available (93% of (A+B+C)) = 539,400 MT = 1189 MM lbs

Most of the seed that has started arriving into the markets is getting “dematted” and going into the warehouses of NCDEX – the commodity exchange. As regards to pricing, despite the good arrivals from the new crop, Guar seed/splits prices are not declining much further. Hence we believe that although it is unlikely that prices are going to run up anytime soon, we might be now close to the bottom.