Guar Gum Market Intelligence

Industry Outlook & Drivers

Global Market Outook on Guar Gum

The prices of by-products, like guar churi and korma, in the market are critical in deciding the price of guar gum and profitability of guar splitters.About 90 percent of the total guar seeds produced is used for production of guar gum and rest is used for culinary purpose and cattle feed

• Guar seed contains 29 percent endosperm, which is separated from the seed and which finally dried and ground to obtain guar gum
• The remaining part of the seed (the husk and the germ) is processed into guar meal, which is used as a cattle feed
• The guar splits are then either directly used as guar gum in some industries as thickening agent or are further processed by major chemical players to make customized polymers (guar gum polymers) and other chemical compounds for their customers to meet their specific requirements

Supply Chain Analysis

Despite the opaque nature of guar gum's supply chain in India, demand continues for the commodity. A close monitoring of the development of guar supply chain may help the large buyers to predict future price and supply trend.

The commission agents charge a prescribed brokerage of two percent from the buyers to facilitate the trade in APMC markets.

• These seeds are collected, stored, loaded into transport, and taken to the mundi (market). It is a large market place, where all the agricultural produce of the farmers are brought and sold to ensure fair price to the farmers
• The produce brought by farmer is auctioned by authorized Aadat (Commission Agents)
• Auction participants mainly consist of traders, splitters, processors, and stockist. No exporters are involved here, as export of guar seeds is not allowed
• There are lot of traders, stockist, and brokers, who have their office situated in the mundi area itself. They deal with multiple commodities. However, guar has been their favorite recently. There are around 300–400 guar splitters located just in Rajasthan
• The major suppliers of guar chemicals in India, such as Vikas, HiChem, Rajasthan Gums, etc., are vertically integrated from making splits to exporting of the chemicals
• The guar market is fairly consolidated as the top five processors are believed to be controlling more than 60 percent of the market

To facilitate voluminous supply of guar complex products, traders or wholesalers are being widely observed as a convenient and profitable distribution channel.Over two-fifth of the revenue being procured in the global guar complex market is likely to be accounted by their distribution through traders or wholesalers.

Physiological Characteristics of Guar Crop that Supports Environment Sustainability

Guar cultivation provides multiple ecosystem services and also require lower agronomic inputs. Some of these activities include prevention of water pollution and nutrients conservation, storage of more carbon, development of better pest tolerance, and lower utilization cost.

• Cost effectiveness and environmental impact of the guar production process are likely to be positive compared to other crops
• It has longer photosynthetic and growing season and longer green leaves, which enhance the processes of air purification
• The presence of a greater root mass reduces the risks of soil erosion and soil carbon loss compared to other crops
• Guar crops have deeper rooting depths where they intercept, retain, and utilize more precipitation
• It is a low emission crop, since the production process release less than 3,000 kg of CO2 equivalent emissions
• Augmenting usage of guar gum in industries proportionally increase its demand. This could lead to a trend of replacing trees with shrubs, which may increase ground level ozone (O3), which is a polluting gas
• Despite this, the crop successfully converts previously arid areas into more productive uses. The guar gum has therefore been seen to have more positive environmental impact than other similar plants

Sustainability Measures by ECO Guar Group

• Eco Guar Group practiced sustainable farming avoiding hazardous synthetic chemicals along with green technology and zero manufacturing discharge
• Eco Guar Group supports stronger, vital communities, helping make life healthier and safer for workers, and the families in the surrounding communities

Economic

• Eco Guar Group uses green technology in its guar production. They use solar panels to generate renewable energy to heat water required in processing of guar, thereby reducing LP gas usage by over 50 percent
• Additional measures require all motors used in manufacturing to be EE3/EE4 highly-efficient rated, reducing electricity usage by 25 percent

Environment

• Eco Guar Group supports sustainable practices, promoting healthy ecosystems with no actions that degrade soil, water, or other natural resources, and making continual efforts to lessen the environmental footprint
• Overall, there is zero discharge with no smoke, dust, and polluted water. The only remaining component from guar gum processing is the guar husk, which is recycled into the natural animal feeds of guar korma and guar meal churi

Social 

• The company procures its crop from rain-fed fields in semi-arid states in Northern India - Rajasthan, Punjab, and Haryana
• Since it is rain-fed and does not require additional irrigation, guar neither draw from ground water natural resources nor impact communities' water supply