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  Market report Guar gum March 2015

Market report Guar gum March 2015

The prices of guar gum have started to decline rapidly in recent weeks.
Due to the fall of oil prices and thus lower quantities of guar gum needed for the fracking industry, guar prices have dropped remarkably.

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No one has foreseen such a dramatic fall in prices of crude oil. As a result the guar industry in India has been hit considerably. For the Indians it is a disaster. They have mainly focused and emphasized on the oil industry for many years and guar gum for the food industry played a low key role. This has changed all of a sudden. With much less volume for the technical industry and the relatively stable demand in food guar gum producers are looking for orders from food business again.

The supply of raw material is more than sufficient and the aggregate demand is weak. With daily falling prices, the market behaves cautiously in anticipation of further price reductions.
In recent weeks, the question was raised when the bottom will be reached and at which level.

Last week prices started to raise for the first time and orders were placed in anticipation of further increases. The low price level invited some buyers to cover at least part of their medium demand.
The next days will show whether the upward trend will continue or if the hike was just an intermediate happening. (Prices today eased again)

The current unattractive price will not encourage farmers to invest in guar for the next crop. This will end up in lower quantities for 2016 and finally to price stability at which level whatsoever.

The present weakness of the Euro impacts prices of guar which is traded in US Dollars only.

We continue monitoring the market and we will keep you informed regularly.

A chart of the price trend of guar in recent years is attached.

Dietmar Neupert
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price development guar in the last years
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Neupert Ingredients GmbH
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Tel.: +49 4173- 51591 - 0 | Fax: +49 4173 51591 - 99
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