Guar: Farmers mint money from common man's food

NEW DELHI: It used to be a dry and arid land legume grown by poor farmers in Rajasthan, Haryana , Gujarat and Madhya Pradesh. Till a few years back, it sold for as low as Rs 1,000 a quintal.

Eaten either at home by farmers (some may remember it as guar ki phalli) or sold off for export to be used as a binding and thickening agent in edible products like ice creams, it sells now for anything between Rs 10,000-Rs 30,000 a quintal.

The reason is that the guar seed has become a lubricant for the multibillion shale oil and gas drilling where its used for the 'fracking' process.

The result is a frenzy that is connecting traders from Houston to Jodhpur and turning the obscure plant grown mostly on wastelands into a much sought after commodity. The rising prices and short supply is making farmers and business groups push for more acreage.

India produces 80% of the global guar crop with Pakistan and the US following a distant second and third though all are trying to increase acreage of the bean. Because it is a rainfed crop with relatively little organized market, upscaling production has not been a smooth process.

The demand for gum extracted from the guar seed or cluster bean as it is known in English has risen so high on the commodities market that the regulator, Forward Markets Commission, has had to step in once to halt futures trade in illegal transactions .

The boom could be temporary as the shale oil and gas industry in the US, worth $30 billion, is furiously looking for alternatives as prices of guar go up.