Guar seed area to fall as prices dip drastically on less demand from export markets

KOLKATA: Guar seed acreage in the states of Rajasthan, Haryana and Gujarat is likely to drop by 20% -25% in kharif 2016 in comparison to last year as farmers are reluctant to grow the crop as prices have fallen drastically due to less demand from the export markets.

It is likely that farmers may shift to pulses, cotton and groundnut crops as prices of guar fell more than 50% and exports plunged 57% in 2015-16 compared to that in the previous fiscal. Guar gum is now fetching Rs 55 per kg instead of Rs 120 a year ago. "This has not gone down well with farmers and a large section of them will shift to other remunerative crops. With MSP of pulses being increased farmers may shift to pulses," said P.K. Hissaria, managing director, Sunita Hydrocolloids.Exports of guar gum, the main by product of guar seed dropped to 2.25 lakh tonnes in 2015-16 from 5.25 lakh tonnes a year ago.

Prices of guar gum has plunged to seven-year low as demand waned from the North American-oil drilling industry, which is putting projects on hold amid a drop in crude prices. Hissaria said that guar is grown is 40 lakh hectares of land in India. "This year the acreage might drop by 20% -25%," said Hissaria.

The Met department has forecast a normal monsoon and and therefore guar farmers from the semi-arid states of Rajasthan, Haryana and Gujarat feel that cultivation of water consuming crops will not pose any problem in this year's kharif season. "Guar cultivation requires very little water, which is why it is grown in these states," said Hissaria. There was drought in the last two consecutive years which made the farmers sow guar. Even prices were remunerative.