Guar demand up, but farmers can't make most of uptick

KOLKATA: Guar farmers from Rajasthan and Haryana are not being able to take advantage of a 15% rise in demand for guar gum in the second half of FY17 compared with the first half as cash-starved mandis are not being able to buy guar from them.

Just after demonetisation was announced on November 8, traders had suddenly started buying guar and farmers got a premium of up to 20% on their harvest, but in old currency . However, those sales took place through mandis, and via auctions. But off-mandi sales have now slowed down significantly as old notes have been deposited with banks.Farmers now have to depend largely on mandi offtake.

Talking to ET, Rajesh Kedia, director, Jai Bharat Gums & Chemicals, said, “The oil drilling market has im proved in the second half of the current fiscal. The demand for guar gum has therefore increased by 15%.“ Based on this growing demand, the industry is expecting an export of 3 lakh tonnes of guar gum in FY17 comparied with 2.6 lakh tonnes in the last fiscal. Since the demand increased, prices of guar seed and guar gum shot up by15% to` . 60 . 32-34 per kg and` 65 per kg, respectively . However, the major problem that the trade is facing is that arrivals of guar has fallen drastically as there is a cash shortage in the market. Prior to demonetisation, arrivals at the mandis were 60,000-70,000 tonnes, but it has dropped to 15,000-20,000 tonnes.

“Mandis located in tier I and tier 2 cities such as Sri Ganganagar and Hanumangarh in Rajasthan and Hisar and Sirsa in Haryana are getting guar seeds as there is some supply of cash and some transactions are taking place in cheques,“ said Kedia.