GUAR REPORT

Guar Seed / Guar Gum

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Index

Index. 2

1. Introduction. 2

2. Growing Area. 3

3. Cropping Season. 3

4. Production. 3

5. About Guar Gum.. 4

6. Uses. 5

7. Economics of Guar processing. 7

8. Price Behaviour 8

9. Delivery Procedure of NMCE Guar seed. 10

10. Flow Chart of Delivery Mechanism of NMCE. 13

Annexure - I 14

Annexure - II 15

Annexure - III 16

 

 

 

 

 

 

 

 

 

1. Introduction

 

Guar or cluster bean is believed to have originated in Africa but is been grown throughout southern Asia since ancient times as a vegetable and fodder crop. Guar has been cultivated in India and Pakistan for ages for use of its tender pods as fresh vegetables and other parts of the plants to be used as cattle feed. The plant is extremely drought-resistant, being able to absorb efficiently all ground water. It grows therefore easily in those semi-arid regions where less hardy crops perish. The major world supplier of guar seed are India, Pakistan and United States.

2. Growing Area

 

Guar is a crop of semi arid–sub tropical areas spread over the North and North West of India and East and South East of Pakistan. India accounts 80% of the world guar production. Guar is grown in arid zones of Rajasthan (74.15%) and other some parts of Gujarat, Harayana, Punjab, Madhya Pradesh. Jodhpur City in the North Western state of Rajasthan in India is the most important processing centre of Guar Gum and contributes approximately 40% of the world's Guar Gum supply.

 

3. Cropping Season

 

In India, the sowing season for guar seed is end of July and it is harvested during November. It is usually 90 days crop.

Guar is a rain fed monsoon crop, which requires 8-15 inch of rain in 3-4 spell. For effective guar cultivation, the crop needs two rainfalls before sowing, one rainfall when the crop buds out and another when the crop comes up well and blossoming starts. Then it requires plenty of sunshine and dry weather to come up really well. During harvesting period it again needs good sunshine in order to dry up and become usable for industries.

 

4. Production

Production of Guar is mainly concentrated in the arid region of Rajasthan, Gujarat, Haryana and some part of Punjab. Rajasthan contributes more than 70% in Guar production therefore industry based on Guar is also concentrated at Jodhpur and surroundings in Rajasthan.

Last five years production data of Guar given as under:

Year

All India

(in Lakh Tonne)

Rajasthan

(in Lakh Tonne)

All India Average Recovery of Guar gum @30% (in Lakh Tonne)

1998/99

4.5

3.1

1.35

1999/2000

3.3

2.3

0.99

2000/2001

6.8

4.7

2.04

2001/2002

11.0

7.5

3.30

2002/2003

4.0

2.8

1.20

2003/2004

8.50

6.0

2.50

2004/2005

4.0

2.8

0.75

2005-06

6.0

4.2

1.80

Indian Guar Gum is exported every year to the tune of 1 to 1.15 lakh tones to various countries and domestic consumption is estimated somehow 20 to 30 thousand tonnes per annum. It is evident from the above that the trend of production has been erratic due to heavily dependence on monsoon.  This has direct and corresponding effect in the price of Guar and Guar Gum. We have witnessed fluctuation in prices from Rs 850 / quintal to Rs 3200 / quintal during the last 4-5 years. Guar being pest resistant and longer self life is the fittest commodity for hedging so that risk of price volatility can be managed and supplement stability to the market.

5. About Guar Gum

 

Guar gum is a white to yellowish white powder. It is nearly odorless. It is extracted from the seed. Guar Gum Refined Splits (Endosperm) is the sole raw material for processing Guar Gum Powder for Pharmaceutical and Food Grade material. Guar gum is an emulsifier, thickener, and stabilizer approved for use in a wide range of foods, cosmetics, and pharmaceuticals. It is sold as a white to yellowish odorless powder, which is available in different viscosities and different granulometries depending on the desired viscosity. Its thickness is a function of temperature, time, and concentration.

 

One advantageous property of guar gum is that it thickens without the application of heat. Guar Gum has the following properties, which make it useful in variety of applications.

*       Easy solubility in cold and hot water.

*       Film forming property.

*       Resistance to oils, greases and solvents.

*       Better thickening agent.

*       Water binding capacity.

*       High viscosity

*       Functioning at low temperatures

         [Granulometric à pertaining to distribution of grain sizes in sand etc.]

6. Uses

Guar, one of the most versatile seed, rich in multiple properties and uses.

Guar Seed is the basic Raw Material. The Guar Seed is processed and the following are the results:

Guar Seed à Guar Gum Refined Splits (Endosperm) à Guar By-products Churi & Korma for Cattle Feed.

After removal of the gum, the seed material can be used for stock feed as it has high protein content (35%), but the material.

 

Application of Guar Gum è

 

Guar Gum is generally used as an excellent and reasonable thickener and stabilizer in many aqueous systems.

The main uses are:

 

Ø      FOOD:

*    Bakery
One of the major applications for guar gum powder is the production of bread. Even small quantities of guar gum powder added to the dough increase the yield, give greater resiliency, improve texture and give longer shelf life.

*    Dairy
In this field guar gum is used as an excellent binder of water and a stabilizer. It is used in the production of ice-creams, sherbets, cheese, liquid milk products, and others.

*    Meat
Guar can be used as lubricant and excellent binder for various meat products. It allows storing with less loss of weight and can decrease the filling time for cans.

*    Dressing and sauces

Guar can be used as an excellent thickener to improve the stability and appearance of salad dressings, barbecue sauces, relishes, ketchups and others. It is quite compatible with highly acidic emulsions.

*    Beverages
Guar can be used as stabilizer for chocolate drinks, fruit nectars, and juices.

*    Miscellaneous food applications

*    Dry soups, sweet dessert, canned fish in sauce, frozen food items and others.

*    Pharmaceutical and Cosmetics

*    Guar Gum can be used as a thickener for various cosmetics and pharmaceuticals. In compressed tablets Guar Gum can be used as a binder and disintegrator.

*    Several studies have found significant decrease in cholesterol levels after administration of guar gum in human consumption.

Ø      Industrial application of guar gum includes the textile industry where guar gum's excellent thickening properties are used for textile sizing, finishing and printing.

Ø      In the paper industry Guar is used as an additive where it gives denser surface to the paper used in printing.

Ø      In the explosive industry guar is mixed in Ammonium Nitrate, Nitroglycerine and Oil explosives, where it helps maintain the explosive properties of the product even in wet conditions.

Ø      In the food, pharmaceutical and cosmetics industry Guar Gum is used as an effective binder, stabilizer, disintegrator and thickener.

 

7. Economics of Guar processing     

 

a. Cost of 100 kg. Guar – White (98%) with  Mandi expenses @ 3.6% (1.6 % mkt. cess + 1% K.K. + 1% Commission)

1706/-

c. Handling / lever expenses like weighment, sutli, sewing, loading – unloading

       5/-

d. Local cartage from Market yard to Mill / Factory

      3.5/-

Ex. Factory cost

1714.5/-

Add: Processing Expenses @  5 % :-

a.    Cash discount       2.5%

b.    Dust and kachara  2.0%

c.    Weight loose         0.5%

 

 

      86/-

Total factory cost

1800.5/-

Recoveries

 

a. Korma               =  40 kg.

 

b. Churi                =  27 kg.

 

c. Guar Gum         =  30 Kg.

 

d. Processing loss =  3 kg.

 

                               100 kg.

 

Less Present realizable market value of

 40 kg Korma @ 6.3 / kg.

 27 Kg. Churi @  7.1/ Kg.

- 252.0

- 191.7

   

Value of 30 kg. Guar Gum

1356.8/-

Cost per Kg. of Guar Gum

45.22

Present market rate per Kg.

45.52

Parity

0.30/ kg

8. Price Behaviour

   

Availability of guar seeds determines prices of guar split and guar gum in the commodities market. The rates are quoted as per the spot trading in Jodhpur, India. Generally, Guar seed prices depend on weather conditions, demand, political climate, and the investor’s speculation of the futures.  As availability of the guar is limited, prices of guar deepened maximum on speculation of the traders and stockiest active in the market. This makes it highly volatile commodity and can fluctuate by 10% during some highly volatile days. For example, during the days 13th, 15th and 22nd December’2004 the volatility was above 20% also. In the previously year also the market has shown the same type of abrupt volatility during the moths of June, July and August.

 

Since 1st May 2003 15th September 2003 Guar spot market has visualized a sharp crash from Rs 1600 to Rs 750.  The probable reason for this unusual market crash was mere anticipation of huge crop arrival. In the year 2001-02, there was huge production of Guar seed i.e. 11 lakh MT. In the Immediate next year production was only 4 lakh MT; and in the coming year 2003-04 the carry-forwarded stock of 2001-02 rotated in the market, and also it added with a market rumor of very good crop prospect. Therefore ultimately the same led to unforeseen price fall in the guar market. During the period Jan - Jun 2004 the market price of Guar Split was quite stable at Rs 875 a quintal to Rs 960 a quintal level. However after June 15th the price increased sharply. By the third week of July (20th July), the price had reached Rs 1436 a quintal. During the corresponding period, the price of guar seed increased from 881 to 1436. The primary reason for this sharp increase was that the 2004 Monsoon rains in the major guar producing areas around Jodhpur were delayed thereby adversely affecting sowing of guar that normally occurs in mid July. After the first rainfall of the season in Jodhpur on July 29, the prices retreated from their peak of Rs 1416 to 1225. Development of substitutes has impacted guar demand lately. Various new thickening agents developed from Tamarind kernels or other substitutes have led to drop in guar consumption during 2000. This continues to have their influence on guar prices.

 

9. Delivery Procedure of NMCE Guar seed

 

*    Unit of Delivery: The minimum unit of delivery for Guar seed shall be 10 MT.

*    Delivery Size: Delivery is to be offered and accepted in lots of 10 MT or multiples thereof.

*    Quality Specification:   The contract grade for delivery of Guar seed futures contracts made under NMCE Regulations shall be Guar seed conforming to the quality specification indicated in Annexure – I No lower grade shall be accepted.

*    CWC Warehouse: NMCE uses CWC warehouse for receipt and delivery of Guar Seed. Receipt and delivery of Guar Seed will be undertaken only from CWC warehouse. The details of the CWC warehouse are as per Annexure – II.