JAIPUR (Commoditiescontrol) - Guar gum industry got support from guar korma when the industry faced its worst phase amid decline in guar gum exports. Global demand in guar gum fell due to slump in crude oil and natural gas prices, but production remained, adding pressure on its prices. In such an adverse scenario, guar korma lent some support to the industry. However, recent rise in guar korma rates make it less attractive in the international markets, as its prices become costlier than soybean DOC.
As per the sources, guar seed was trading near Rs 27,000/100kg three years ago, while guar gum prices were around Rs 90,000/100kg but guar korma was only at Rs 500/100kg at that time. But the circumstances have changed now as guar seed is trading near Rs 3,700/100kg and guar gum at around Rs 7,800, but guar korma prices rose considerably and are quoting near Rs 2,600/100kg.
The reason behind the rise in guar korma rates were higher protein content, which is around 45 percent and it can be increased to 58 percent by cleaning and roasting, while soy oil cake, major competitor of guar korma, contains only 45 percent of protein.
Cattle feed sector prefers guar korma over soya protein as it is more digestive in nature and cheaper than soy oil cake. Guar korma is prefered by the cattle feed industry in substantial amount.
Guar korma availability in domestic markets is tight as most of the guar processing plants in the country are closed due to poor demand in guargum from overseas. Supply of guar korma is poor against strong demand and hence better scope for guar korma from cattle feed sector. Nearly 18-20 percent of korma is obtained from average quality of one quintal (1 quintal is equivalent to 100kg) guar seed while churi at 44 percent and guar gum at 29-30 percent and wastage remains at 6 percent.
Guar korma (Guar meal) exports were recorded nearly 1.44 lakh tons in 2014-15, higher than a year ago as the volume of exports of the same product was over 1.32 lakh tons in 2013-14, while it was around 74,814 tons in 2012-13.
Guar korma exports stood at 80,151 tons in 2011-12 and 41,424 tons in 2010-2011. In the current fiscal year 2015-2016, exports of guar korma recorded at 10,855 in the month of April only. India exports 70 percent of guar korma products to Europe and rest of 30 percent to the U.S.
Soybean De oiled Cake (DOC) has been quoted at $370 per metric tons in International markets, that is the reason, guar korma (guar meal) buying has weakened as it was in good demand when prices were at $400-425/ton but the product at present is being quoted at $500-525 per metric ton. Therefore, it doesn’t attract buyers in a significant way, said an exporter requesting anonymity. Only regular buyers are purchasing some quantity at the current prices, he added. Similarly, when guar churi was trading near Rs 250/ton, it had more buyers, but with rise in prices to $325/tonne, buying is appearing thin.
Most of the plants have been shut down as they couldn’t find parity in guar crushing. That is the reason, korma production is not even at 200-250 tons a day, said a trader. Korma prices may fall with arrivals of new guar seed crop. However, factories will hardly continue their operation as guar gum demand is very slow or they will be operational in limited number as guar gum demand is unlikely to improve in near future with fall in crude oil prices in global markets. This way, the availability of korma may be low with short operation of factories for guar crushing.
Ratanlal Jain, Adarsh Guar Gum Industry, Jodhpur said, “Korma roasted is exported, but demand is low at higher level.” Demand for the commodity is sluggish in the domestic markets as well due to ample availability of green fodder in rainy season, he added. Korma prices may drop from Rs 2,600/100kg only after the arrivals of new crop as present korma stocks is poor and its demand regains in December when there is scarcity of green fodder, said Jain.
Presently, production of guar korma matches demand, however, exports remain weak at higher level, said Om Soni, Shriram Gum & Chemicals based in Jodhpur. Prices of korma do not appear to fall before Diwali despite limited demand amid tight supply, he added.
Demand in guar korma is also being affected with lower rates of soybean DOC. When asked whether korma would touch Rs 5,000/100kg, Soni responded clearly, it is possible only when soybean prices surge up to Rs 7,000/100kg level from the current Rs 3,150.
(By Commoditiescontrol Bureau; +91-22-40015533)
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