The biggest consumer of the guar gum powder is the petroleum industry. Its usage in shale gas production has been the single biggest usage. This caused a surge in demand for the product in the year 2016 and the trend will go on in 2017.
2016 – 2017 Production Trends
The biggest producer of the guar is India (80%), followed by Pakistan (15%) and others at 15% of the total global demand. In India it is produced in the state of Rajasthan and Haryana. The year 2015 experienced a decline in production to 2 million metric tons from a high of 2.5 million metric tons in the period 2014/2015. The seed to Gum conversion ratio also stood at 27 – 33%.
The production of the guar seed is also dependent on the monsoon rains, which could have caused the dip in production in the year 2015.
Price and Market Trend
The prices of the guar gum powder have now stabilized after a rapid decline caused by the crush in oil prices. In the past, the United State was the biggest importer of the powder and was primarily for crude oil drilling. Currently China is leading in the gas exploration and could be the leading market for the product.
Substitution by the synthetic gums such as the hydrocolloids, xanthan and the tara gums will not be a major influence owing to the superior performance of the guar and the market price adjustments that have occurred.
Expected Performance for the Year 2017
Apart from the usage in the petroleum industry, the guar is also widely used in the pharmaceutical industry, textile industry, food processing and most recently in the manufacture of explosives. This recent discovery is also set to create another demand pull which could trigger a price hike. This presents good opportunities for vendors in the current and forth coming years.
Market Price Fluctuations of the Guar Powder
The current inventory levels are becoming a substantial influence on the price of guar powder.The high levels kept by the shale producers could mean price stability over the coming period. Continued shale gas exploration will be influenced by the price of the crude oil. Over production of oil by the OPEC nations will translate to price stability rather than decline and shale exploration will be constant.The recent increased shale exploration in India has also created a local demand.
Major Sectors to Drive Purchases
The market segmentation of the guar gum is classified into grades and demand regions. Different grades of the product are used up by different industries. The grades are industrial grade guar, food grade and pharmacy grade.
Thus production and processing of the guar powder is based on the final target market. Food-grade guar powder is highly refined and processed to meet the strict hygiene conditions. It is used as an additive in various products such as dairy,bakery, sauces, confectioneries and beverages.
Industrial guar powder I used in oil refineries and gas exploration, while the pharmacy grade is used in manufacture of medicines.
Conclusion
In the year 2017 to 2020, it is expected that the food-processing sector will contribute substantially to the consumption of guar Gum. This is due to increased reliance on convenience and processed foods across the world. The shale gas exploration sector will also be a key determinant of demand for the guar powder.
This Article has been written & posted by Ajit Patel.