2015

Guar Industry Outlook 2015

Research Co-ordinator Dr Hema Yadav (Deputy Director, NIAM)

Survey Co-ordinator Dr Shalendra (Research Officer, NIAM)

Survey Team Ajit Kumar Prasad* Pratima Goswami* Rahul* Sandesh Pednekar*

Data Analysis Team Anu Peter V* Enamul Haque* Manisha Shah*

* Management Students of Post Graduate Diploma in Agribusiness Management (2013-15)

PublishedNovember, 2013

Report made for : National Commodity & Derivatives Exchange Limited

I

Foreword

India is the largest producer of guar and contributes about 80% of total guar and guar gum production in the world. Guar Gum is an important ingredient in producing food emulsifier, food additive, food thickener and other guar gum products. Guar gum is purely an export oriented commodity with about 80% of total output exported from the country.

The Guar Industry has evolved from being a used for domestic and ruminant feed purpose to finding used in industry. Owing to new technology, research and development the natural gum property of guar had varied applications from food, pharma industry to oil Industry. The guar industry is poised to grow and develop owing to high focus on research in Universities and technical institutes of the world. The keen interest of industry, government and community will result in cohesive partnership to foster profitable global value chain of guar gum.

The study is based on consultation with various stakeholders like farmers,traders, processors, exporters, researchers, etc. at various locations in Rajasthan and Haryana and taken their views for holistic development of the industry. The study has also referred to the major data sources of research paper, government publications, and data from industry and markets.

The study focuses on analysis of price movement, weather determinants, demand from industry, and requirement of research and market development.

In order to promote the exports of guar and its derivatives from the country, need of the hour is long term planning with single vision by taking into account the views of prime stakeholders.

The study has been undertaken by Dr Hema Yadav and Dr Shailendra, faculty members, NIAM.

I am hopeful that this report will be used in envisioning strategies which unites all parts of the value chain and links the supporting pillars to maximize benefits to all sakeholders in the industry

R P Meena, IAS Director General

NIAM, Jaipur

Guar Industry Outlook 2015

Research Co-ordinator Dr Hema Yadav (Deputy Director, NIAM)

Survey Co-ordinator Dr Shalendra (Research Officer, NIAM)

Survey Team Ajit Kumar Prasad* Pratima Goswami* Rahul* Sandesh Pednekar*

Data Analysis Team Anu Peter V* Enamul Haque* Manisha Shah*

* Management Students of Post Graduate Diploma in Agribusiness Management (2013-15)

PublishedNovember, 2013

Report made for : National Commodity & Derivatives Exchange Limited

II

About NIAM

CCS National Institute of Agricultural

Marketing (NIAM), as an apex Institute

for agricultural marketing, is playing

a vital role in expediting the reform

process, creating awareness, preparing

professional managers through its

mandate for research, consultancy,

training and education programmes.

NIAM is an autonomous body

under the aegis of the Ministry of

Agriculture, Government of India.

Training is imparted to higher and middle level executives of the state agricultural marketing board, Directorate

and line departments and farmer groups of various states. Consultancy is carried out for setting up of markets

and various market infrastructures as well. Action oriented research is conducted by NIAM to give solutions for

specific problems in the field of agricultural marketing. With a view to making agricultural marketing research a

more effective instrument for making agricultural marketing system of the country an effective system of rural and

agricultural change and strengthening the policy making and planning machinery, the institute undertakes and

sponsors research in agricultural marketing relating to the problems of regional and national importance.

Apart from Training, Research, Consultancy in Agricultural Marketing NIAM offers two year Post Graduate Diploma

Program in Agribusiness Management PGDABM) for students with undergraduate degree in Agriculture and Allied

Sciences.

The Institute is playing a pivotal role in creating awareness amongst farmers, creating research base on marketing,

post-harvest management, commodity futures, information and communication technology, grading and

standardization. NIAM is also playing a key role in imparting international training programmes for agriculture

marketing officers.

III

About NCDEX

As India's leading online exchange, NCDEX is where customers repose trust. It offers the widest range of benchmark products across agriculture, metals and precious metals. NCDEX brings buyers and sellers together through its electronic trading platform. With a widely held shareholding, it enjoys the distinction of being the only exchange in the country promoted by national level institutions. The institutional promoters and shareholders of NCDEX are prominent players in their respective fields and bring with them institutional building experience, trust, nationwide reach, technology and risk management skills.

NCDEX – Some Facts

Established in 2003, NCDEX offers futures trading in more than 30 agri and non-agri commodities.

Its shareholders are Shree Renuka Sugars Limited, Life Insurance Corporation of India (LIC), National Bank for Agriculture and Rural Development (NABARD), National Stock Exchange of India Limited (NSE), Indian Farmers Fertiliser Cooperative Limited (IFFCO), Jaypee Capital Services Limited

Punjab National Bank (PNB), Build India Capital Advisors LLP, Canara Bank, IDFC Private Equity Fund III, Oman India Joint Investment Fund

CRISIL Limited, InterContinental Exchange (ICE), Goldman Sachs Investments (Mauritius) I Limited.

It had 848 registered members and client base of 20 Lakh as on 31 July 2013

Trading conducted on more than 49,000 terminals across 1000 centers in India as on 31 July 2013

It facilitates deliveries of commodities through a network of over 594 accredited warehouses through 8 Warehouse Service Providers with holding capacity of around 1.5 million tonnes.

Average deliveries of 1 lakh MT at every contract expiry; Average delivery ratio for Q1 of financial year 2013-14 is 98 %

Introduced N- Charts – an advanced web based charting tool provided to users free of cost, helping them in technical analysis.

Launched COMTRACK® - a proprietary electronic warehouse accounting system

Exchange for Physicals - recently announced EFP (Exchange for Physicals) facility in 18 contracts traded on the Exchange platform, which will help trade participants in addressing their counterparty and business risks inherent in the bilateral transactions in the physical market.

IV

Table of Contents

Executive Summary 1

Chapter-1: Introduction 3-6

Chapter-2: Industry Outlook 7-14

Chapter-3: Guar Seed Marketing and Supply Chain 15-18

Chapter-4: Price Movement of Guar 19-21

Chapter-5: Guar Trade Scenario 23-29

Chapter-6: Research and Development Efforts in Guar 31-33

Chapter-7: Issues and Challenges in Guar Industry 35-42

Annexures

Annexure-I 45-50

Annexure-II 51-52

Annexure-III 53

Annexure-IV 55

References 56

1

Executive Summary

The report “Guar Industry Outlook 2015 gives an overview of guar industry with respect to 2015 by giving future perspective with reference to past. The report can be an important information source for the stakeholders to make informed decision with respect to highly uncertain future of guar industry.

The Guar Industry has evolved from being used for domestic and ruminant feed purpose to finding applications in industries. Owing to new technology, research and development the natural gum property of guar has varied applications from food, pharma industry to oil Industry to and is poised to grow.

India is the major producer of Guar Seed followed by Pakistan and US. India's guar seed production is subjected to temporal fluctuations and it ranged between 2-18 lakh tons during 2005-06 to 2012-13. The area under cultivation of guar in India has not changed much from last 10 years even then the production has increased to a great extent due to increasing productivity. Rajasthan is a major producer of guar among Indian states. The State produces more than 70% of total guar seed produced in the country. Haryana is the second largest Guar producing state in India which contributes around 11% of total guar seed production. The productivity of guar in Haryana is much higher than the productivity in Rajasthan.

The processing of guar gives three products mainly viz. guar splits, churi and Korma. Guar split is used as a main products for different industrial uses while Churi and Korma are used as cattle feed.

Nearly 75-80% of the Guar Gum or other derivatives of Guar seed are being produced in India and are exported mainly to USA and European countries. The value added derivatives of Guar seed are used by the various industries in India as well as abroad. Pakistan, Sudan and parts of USA are the other major Guar growing countries which produces nearly 20% of world guar seed production.

India contributes for more than 80% of the world guar split supply. Total world supply of guar split is around 4-5 lakh tonnes in a normal year. It increased upto 8 lakh tonnes as has been recorded in the year 2003-04. The consumption of guar gum by Fast Hydrated Gum (FHG) industry was limited to around 30%. But at present the scenario has changed and the major consumer of guar gum is FHG industry.It is also seen that the demand from food industry has reduced to around 20% only from 50-55% prior to the year 2005.

The market of guar has witnessed a shift which was quite unexpected for the participants in the industry. The mean price of guar from 2007 to 2011 was moving around Rs. 2000/qt. to Rs. 2100. But the high price fluctuations in the year 2012 the mean price of entire period (2007-2013) shifted to a new high at around Rs. 3600/qt. at Jaipur market. The similar price movement has been witnessed by almost all the markets to the same extent. Mean spot price of guar seed for the last two year was around Rs. 7600/qt. In 2013 the price is moving towards stability.

Although AGMARK grades are defined, market is run by industry grade as defined by the traders. Due to the fact that the product has a very long storage life, most of the product purchased from the mandi by traders is released in a staggered way as per the demand for coming years. The price in the market (trader to miller) is influenced by the stock positions. Most of the traders store guar seed in their own storage structures instead of storing in accredited warehouses. Warehousing facilities for storage of guar seed is inadequate thus needs more storage structures to be built. The quality of the commodity is not maintained properly at the warehouses, and there should be strict regulations for the warehouses on quality issue.

The market is constraint by lack of transparency and market information. In spite of the fact that guar has assumed importance of stratospheric level, there is no systematic collection and dissemination of market information to the participants.

All India Coordinated Research Project on Arid Legumes including research in Guar as a mandate is the only research effort towards guar crop in the country. The progress in research and development have been made at CAZARI, Agriculture Research Station (ARS), Durgapura, and CCS Haryana Agricultural University. R&D efforts have focused to produce good quality seed of notified varieties of guar. The scientists are also developing extra early maturing variety. The R&D efforts coupled with training to the farmers for quality seed production is paving way for integrated lab to land transfer of technology.

The future of guar industry is for specialized applications and derivatives. It is envisaged that the industry will move towards product differentiation to meet the specific and niche demand. For example- in food industry there is growing preference for bio-degradable, non-polluting and organic, products. This gives ample scope for leveraging investment, knowledge management, technology and partnerships for technology sharing and transfer.

3

Chapter-1: Introduction

Guar or cluster bean (Cyamopsis tetragonoloba) is believed to have originate from Africa but it’s been grown throughout southern Asia. India and Pakistan have distinct advantage of agro-climatic conditions for the cultivation of guar though it is also successfully grown in U.S.A., South Africa, Australia, Brazil, Zaire and Sudan. Guar is a drought-tolerant, multi-purpose annual arid legume crop cultivated mainly during Kharif season and used for extracting gum from seeds, animal fodder from vegetative part, and also used as green manure.

In India the major guar producing areas are Rajasthan, Gujarat and Haryana. The major producing areas are also important processing areas of guar and its derivatives. Guar gumis exported from Kandla and Mumbai port.

History and Evolution of Guar

Guar is being grown in India since ancient time and the tender green Guar is an important source of nutrition to both human being and animals, which is consumed as a vegetable and cattle feed, respectively. In old times, Guar was only used as rich protein to feed cattle. It is also used as green vegetable in India. After Second World War there was major shortage of locust bean gum which adversely affected the textile and paper industries. At that time Guar gum was found as the most suitable substitute for scarce locust bean gum. In 1953 the extraction technology of guar gum was commercialized in USA and after an about a decade in India.

The Guar Industry has evolved from being a used for domestic and ruminant feed purpose to finding used in industry. Owing to new technology, research and development the natural gum property of guar had varied applications from food, pharma industry to oil Industry. The trajectory of growth of guar industry has been upward as can be seen from figure-1. There has been a rapid growth in area, production and value over a decade from 2002 to 2012.

The guar industry is poised to grow and develop in future owing to high focus on research in Universities and technical institutes of the world. The keen interest of industry, government and community will result in cohesive partnership to foster profitable global value chain of guar gum.

Properties of Guar

Guar is the source of a natural hydrocolloid, which is cold water soluble and form thick solution at low concentrations. The guar seed consists of three parts: the seed coat (14-17%), the endosperm (35-42%), and the germ (43-47%). It is from the endosperm that guar gum is derived, which is the prime marketable product of the plant. This spherical-shaped endosperm contains significant amounts of galactomannan gum (19 to 43% of the whole seed), which forms a viscous gel in cold water. Like other legumes, guar is an excellent soil-building crop with respect to availability of nitrogen. Root nodules contain nitrogen-fixing bacteria and crop residues, when ploughed under, improves yields of succeeding crops

In India guar crop is cultivated during Kharif season, with an annual production of 5.0 to 10 Lakh tonnes. India is the largest producer of guar and contributes 80% of total guar production in the world. Guar Gum is an important ingredient in producing food emulsifier, food additive, food thickener and other guar gum products. India is the largest producer of guar gum products. Its guar gum exporters, guar gum manufacturers, guar gum products suppliers, food emulsifier exporter have reached too many countries. As of now there is a lot of demand for Indian guar gum products, food additives, food thickener and other allied guar gum products. Guar gum is purely an export oriented commodity with about 75-80% of total output exported from the country.

Industrially it is used in mining, petroleum drilling and textile industry. In food it is used as a thickener and as a mean of preventing ice crystal formation in frozen desserts. Guar gum is produced from the seed and this is turned into powder. The powder is used in a host of industries, ranging from bakery, dairy, meat, dressing and sausages, beverages, pharmaceuticals and cosmetics, textile printing, mining, water treatment and paper industry.

4

Cultivation

Guar plant grows well under a wide range of soil types. It thrives best in fertile, medium textured and sandy loam soils, with good structure and well-drained subsoil. The plant cannot stand water-logging conditions.Guar is considered to be tolerant of both soil salinity and alkalinity.

The crop tolerates high temperatures and dry conditions, and is adapted to arid and semi-arid climate. It can be successfully grown in areas receiving 500-700 mm of rains per year and may yield 1.5-2.5 tons per hectare. It is sown immediately after first showers in July and harvested around November each year. The crop yield is directly related to the monsoon. It requires a relatively long growing season of 20-25 weeks. Slight deviation in normal rainfall during budding period results in fluctuation in production.Ideally guar requires two showers before sowing, one spell during budding and another one at the time of blossoming.

Though guar seed production technology/ agronomic practices have been developed by Rajasthan Agricultural University, Bikaner and Haryana Agricultural University, Hisar, and Central Arid Zone Research Institute (CAZRI) Jodhpur, but farmers are not much aware about better technology and best agronomic practices to enhance productivity. The extension efforts to disseminate information about technology, agronomic practices and adoption of seeds in Hanumangarh and Sri Ganganagar districts of Rajasthan and in the states of Haryana have been undertaken by agricultural extension agencies and guar processing industries. Private industries like Vikas WSP, Jai Bharat Gums & Chemicals, Lotus Gums, Guar Global Limited are playing proactive role in reaching out to the farmers and helping them in adoption of HYV seeds by farmers, promotion of guar storage, awareness about price indicators and marketing decisions etc.

Uses of Guar and its Derivatives

Guar was traditionally used for feeding animals in Rajasthan and green pods were used for vegetable purpose. With the development in processing technology in the country, guar seed is being used for extracting gum powder, which has many applications including food preparations, beverages, textiles, paper industry, petroleum industry, mining, explosives, pharmaceuticals and cosmetics.

TraditionalUses of Guar

The traditional uses of guar are as following:-

A. Human Consumption

• Immature pods are dried, salted and preserved for future use

• Immaturepodsaredriedandfriedlikepotatochips

• GreenpodsarecookedlikeFrenchbeans

• Matureseedsareusedasanemergencypulseintimeofdrought

B. Cattle Feed

• Plantsarecutandfedasgreenforage.

• Beansareboiledinalargekettleandfedtocattleahighproteinsource.

C. Medicinal Purposes:

• Plants are mashed, then mixed with oil and used as a poultice on cattle boils.

• Leavesareeatentocurenightblindness.

• Seedsareusedasachemotherapeuticagentagainstsmallpox.

• Boiledguarseedsareusedaspoulticesfortheplague,enlargedlivers,headswellingsandonswellingsdue to broken bones.

• Seedsareusedaslaxative.

D. Crop and Soil Improvement:

• Plantsareusedasshadeforginger

• Guarcommonlyisusedasacovercropandgreenmanure

5

The commercial application of Guar Gum Powder are given in Annexure 1.

Guar Gum is one of the most cost effective and functional ingredients available for formulating food products. Soluble in cold water, Guar imparts a high viscosity and exhibits superior water-binding capacity at low usage levels. These characteristics make it suitable for use in applications as diverse as cottage cheese, sauces, soups, and frozen desserts. The nonionic nature of Guar makes it tolerant to extreme salt and electrolyte levels, important criteria when selecting a thickener for nutraceutical beverages.

Guar is an all-natural ingredient, unlike other common thickeners such as modified food starch and cellulose gum (CMC), and has been shown to provide important health benefits. Numerous studies have shown that the consumption of Guar Gum lowers serum Low DensityLipoprotein (LDL)cholesterol and triglycerides and increases glucose tolerance. In one of the study it was revealed that, rats fed Guar Gum as a part of their diets showed a 25% decrease in plasma cholesterol. Guar is also high in soluble dietary fiber.

Table-1: Application-wise global consumption of guar derivatives

Type of application Target industries Global consumption

Food grade Bakeries (Bread), Dairy (Ice cream, Sherbets, Cheese etc.), Dressing (Sauces, Ketchup’s)

Beverages (Chocolate drinks), Pet Food (Thickener)

20%

Fast Hydrated Gum Oil drilling (as a well stimulant and fraction reducer), Mining (increased yield, filter aid)

Explosives (Gelling agent),Coal Mining (fraction reducer, binding)

70%

Industrial grade Textile printing (Thickening agent for dyes)

Paper (increase strength and decrease porosity)

Tobacco (binding and Strengthening)

Photography (Gelling and Hardening)

Cosmetics & medicines (as binder and thickener) Slimming (Reducing weight & laxative)

10%

A by-product of the guar processing is guar meal (mixture of husks and germ) which is a potential source of protein. It is used for cattle as well as poultry feeding. Toasting of guar meal improves its nutritive value. It can be used up to 10% in poultry diet and can replace up to 100% protein supplements such as ground nut oil cakes in ruminants.

Guar is more than 6 times as effective as starch in thickening power and is used for upgrading starches. Various derivatives of Guar Gum are available that will stiffen gels even up to a water content of 99%. Commercially important derivatives of Guar gum are:

a) Hydroxy and Carboxy Alkylated Guar gum

b) Oxidised Guar gum

c) Acetates of Guar gum

d) Cationic derivatives of Guar gum

e) Sulphated Guar gum

f) Guar gum formate

g) Guar gum acryl amide

h) Borate cross linked Guar gum

i) Reticulated Guar gum

j) Carboxy methyl hydroxy propyl Guar gum

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k) Depolymerised Guar gum

Guar gum has emerged as India's top farm export overtaking traditional heavyweights rice and cotton and looks set to power into the league of top 10 shipments from the country, thanks to the demand from the US oil and gas industry. The guar gum exports have shot up nearly 139% on a year-on-year basis between April and January with shipments of about $4.9billion. In the previous year, it rose 374% in January alone compared to the same month of 2011. (The Economic Times 2013).

7

Chapter-2: Industry Outlook

India has been a major player in guar and guar gum trade in the global market. Guar gum has a wide range of industrial applications and the major demand is from various industries. India is the leading net exporter of guar seeds and guar gum. In the year 2012-13 India exports guar to the tune of 21287 crores of which the share of treated and pulverized guar gum comprises of 83% followed by 15% of refined guar split. The trade value for guar meal is to the tune of 0.66% only in export market. Guar meal is basically used for domestic consumption.

Guar Seed Production and Supply

Guar industry exemplifies an industry which has evolved from being a source of animal feed at the household level to being a major component for myriads of industrial application across the nation. With the better understanding of properties of gum, properties of bonding, simplicity of process, availability of know-how and low cost of production has made this as the most popular natural Hydrocolloid and Fast Hydrated Gum. The other macroeconomic factor such as growth in food processing industry, textile, pharma, oil etc. has increased its demand year after year.

The determinants of guar gum availability for different applications depends on

1) Production Statistics of major exporting countries

2) Factors influencing the yield for example seed variety, climate, agronomic practices

3) Supply of Guar from major exporting countries

4) Demand from different Industries

5) Processing capacity and utilization

6) Nature of Market

7) Future Expectations

Guar Production

India is the major producer of Guar Seed followed by Pakistan and US (Fig-2). India's guar seed production is subjected to temporal fluctuations and it ranged between 2-18 lakh tons during 2005-06 to 2012-13. Guar is a crop of arid, and semi-arid areas spread over the north and north-west of India and east and south-east of Pakistan. It is grown in arid zones of Rajasthan, some parts of Gujarat, Haryana, and Punjab.

Total global production of guar seed is estimated to be 23.5 lakh tones for the year 2013-14, which may fluctuate depending upon the monsoon condition in India particularly in westerndistricts of Rajasthan. Nearly 80% of world guar seed production is contributed by India (Fig- 2). Nearly 75-80% of the Guar Gum or other derivatives of Guar seed are being produced in India and are exported mainly to USA, China and European countries. The value added derivatives of Guar Powder are used by the various industries in India as well as abroad. In Pakistan, Guar seed is mainly grown in Punjab and Sindh province with about 80% of total guar area under irrigated conditions.

Guar Seed Production in India

India produces about 75- 80% of the total guar produced in the world. About 80% of the seed produced was contributed by Rajasthan during 1991-92, but the share of Rajasthan has reduced to around 70% of total guar seed produced in the year 2010-11 (Fig- 3).

8

Apart from Rajasthan, it is being grown mainly in Haryana, Gujarat and Punjab. The share of Haryana has increased from 17% during 1991-92 to 35% of total guar production in the country. Gujarat contributes around 4% of total guar seed produced in the country. It is also grown in some parts of Uttar Pradesh and Madhya Pradesh.

The average production of guar seed in India for the last five years was 17 Lakh tonnes and it is seen that production fluctuates mainly due to variation in rainfall.

The year 2002-03 was marked by a low production to the tune of 2 Lakh tonnes due to severe drought (Fig 4) whereas in 2011-12 the production rose to level of 22 Lakh tonnes due to good rainfall. The area under cultivation and the level of production has an increasing trend for guar crop in India. It is expected that the area under cultivation of guar in India in the year 2015 will be around 36 lakh hectares and the production will reach to around 17 to 18 lakh metric tonnes. From the Figure-4 It is apparent that trend line of production is increasing with a faster rate compared to trend line of area under cultivation due to increasing yield of guar in India.

Guar Seed Production in Rajasthan

Guar is a rain-fed crop cultivated mainly on marginal land and its cultivation starts with the onset of monsoon. If monsoon is delayed, the sowing progress hampers in the major producing districts. Area, production and yield of guar seed in Rajasthan over the years is plotted in Figure-5.

9

It is apparent from the figure that production and yield of guar seed fluctuates highly with rainfall as there is no other source of moisture for the crop. The lowest production of guar seed in Rajasthan was recorded in the year 2002-03 which was 0.28 lakh tonnes, followed by the highest production at 18.5 lakh tonnes in the year 2011-12 (KR 2011-12).

Guar is being grown mainly in arid districts of western part of Rajasthan. In Rajasthan, presently Hanumangarh and Bikaner are the leading guar producing districts. Hanumangarh contributes about 20% of total guar production and about 9.5% of area under Guar cultivation in the state. Bikaner district accounts for about 28.5% of total production but area under guar seed accounts for 29% of area under guar cultivation. Other major guar seed producing districts in Rajasthan are Sri Ganganagar, Nagaur, Barmer, Churu, Jaipur, Sikar, Alwar (see Table: 2). The share of Hanumangarh Bikaner and Barmer Districts in area under cultivation as well as production of guar has increased over the years, while share of Sri Ganganagar, Nagaur and Churu has decreased.

Table-2: Share of Districts in Total Production and Area of Rajasthan

Districts Share in area (TE average) Share in production (TE average)

2011-12 2007-08 2011-12 2007-08

Hanumangarh 9.6 9.9 16.1 20.1

Bikaner 29.1 19.6 28.5 17.5

Sri Ganganagar 5.2 4.4 10.6 11.3

Nagaur 2.8 5.3 2.5 7

Barmer 13.8 13.8 6.0 6.2

Churu 10.6 13.6 9.1 4.9

Jaipur 1.2 2 2.0 4.5

Sikar 2.5 2.9 4.0 4

Pali 1 2 1.1 3.9

Jalore 1.4 2.3 1.5 3.8

Alwar 0.6 1 1.2 3.3

Jaisalmer 13.9 11.2 7.5 2.3

Jhunjhunu 2 2.4 2.9 1.8

Jodhpur 4.6 6.1 5.0 1.5

Bhilwara 0.2 0.9 0.2 1.3

Source: Agricultural Statistics, Rajasthan

Guar has been in cultivation practice in Rajasthan for a long time. The crop has witnessed a varied fluctuation in area, production and yield over the years. The major determinant of fluctuation are intensity and distribution of rainfall along with the variation in temperature. As seen is Table-3,the fluctuation in rainfall have affected the area, production and yield of Guar in Rajasthan, Haryana and Bikaner.

Guar Production in Haryana

The State has made remarkable progress in terms of growth in guar seed production and productivity. The production of guar seed in Haryana has increased from less than 1 lakh tonnes during the year 2002-03 to more than 3 lakh tonnes in 2011-12 (Fig 6). The productivity has also increased from 445 kg/ha during 2002-03 to 1350 kg/ha in 2011-12, whilethe national average productivity of guar seed is 338 kg/ha only.

10

The high yielding and short duration varieties developed by Haryana Agricultural University, Hisar viz.; HG 365, and HG 563 and its extensive use by farmers has improved the productivity level in the state. It is expected that with increasing productivity and area under cultivation of guar, Haryana will help in augmenting the overall production of guar from India.

Guar Seed Production in Pakistan:

Guar seed production in Pakistan ranges between 1.0 to 1.3 lakh tonnes and the trend in production is increasing. Total guar seed production in Pakistan was 1.20 lakh tones during 2006-07, while it has increased up to 1.46 lakh tones during the year 2010-11(PSB 2010-11). Guar is produced mainly in Punjab and Sindh province. Punjab province contributes about 63% of total guar production in Pakistan followed by Sindh with the share of about 32% of total guar production.

Effect of Rainfall on Guar Production

Guar production in Rajasthan fluctuates with fluctuations in rain to a good extent. Although the increment in area under cultivation of guar does not vary much with rain but yield varies which results in increase in production. In case of Rajasthan the value of correlation coefficient r is positive for area and production, rainfall and area, rainfall and production and rainfall and yield. The value of r^2 for rainfall and yield is 41.5 which means the changes in yield is described by changes in rainfall to the extent of 41.5% by establishing a linear relationship between rainfall and yield.

Table-3: Relationship between Area, Production, Yield with RainfallCorrelation between Rajasthan Haryana BikanerArea-Production 0.63 (39.9) 0.89 (79.1) 0.91 (82.6)Rainfall-Area 0.14 (1.9) -0.46 (21.6) 0.14 (2.0)Rainfall-Production 0.48 (23.1) -0.41 (16.5) 0.25 (0.25)Rainfall-Yield 0.64 (41.5) -0.35 (12.4)

Note: r^2 value is in percentage

In case of Haryana production level is varying mainly due to changes in area under cultivation. Here the value of r^2 is 79.1 which indicates a strong correlation between area and production. Variation inrainfall has a negative correlation with area, production and yield. Data shows when there is good rainfall in Haryana farmers are likely to shift towards other profitable rain fed crops.

Beside weather determinants the other factors like non availability of short duration and high yielding variety, non-availability of drought resistant variety of guar seed, low seed replacement ratio also lead to volatility in production of guar.

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Supply Scenario

India contributes for more than 80% of the world guar split supply. Total world supply of Guar Split is around 4-5 lakh tonnes in a normal year.It increases upto 8 lakh tonnes as has been recorded in 2003-04.

Going to the aggressive research and development efforts in countries like U.S., Australia, Sudan etc. the supply side is expected to be stronger and the almost monopoly of India is under challenge. The other countries of Europe have commercialized the crop with improved technology for derivations and testing are fast emerging as competitors.

Adoption of improved seeds in High Yielding Varieties in other parts of the world

Research and Development in production and processing in countries like USA, Australia, Sudan, Zimbabwe etc.

Improved technology for enhancing the applicability of guar gum for industrial uses in countries like France, Germany, Spain, Belgium etc.

Increase in the volume of Guar in world market

Price stabilization due to expected strong supply side

Demand Scenario

Demand for guar is almost constant over the years but supply varies largely between years. Due to high fluctuation in production the demand derived mainly depends on demand from industries like oil, textiles, food products, etc. The insights into the industry revealed that there has been a migration of demand from food grade to industry grade.The food grade gum has been substituted by synthetic gums for achieving price competitiveness in food products. At the same time the emergence of demand of guar from the US petroleum industry and also the oil fields of Middle East has changed the scenario.

Prior to 2005 the major demand form the industry was for food grade guar gum. In Europe, guar gum has EU food additive code E412. Xanthan gum and guar gum are the most frequently used gums in gluten-free recipes and gluten-free products demand for the food grade guar gum was around 50% of the total guar gum consumed. The consumption of guar gum by Fast Hydrated Gum (FHG) industry was limited to around 30%. But at present the scenario has change and the major consumer of guar gum is FHG industry while the chunk of demand from food industry has reduced to around 20% only.

Looking at the supply demand scenario, the total supplies for 2010-11 is reduced in fact after a great revival in production for the year 2010-11. Overall supplies of Guar seed for the year 2010-11 is 104.7 lac bags v/s 105.7 lac bags in 2009-10. The reason for such a miniscule drop in supplies after a revival in Guarseed production is thin carry over stock from previous year (APEDA Report).

The seasonal demand for guar gum is at its peak during the months of Nov-March around the world. As the reason being quite simple the majority of the drilling activities of crude oils take place during these months.

Level of Processing

The year 2005-06 became a remarkable year for the development of Guar Industry. The demand for Fast Hydrated Gum for fracking purpose escalated the market to a new horizon. Prior to this shift in demand there were very few units which were processing guar. In the state of Rajasthan there were around 50-60 units only which were engaged in guar processing. High demand of FHG resulted in price rise due to which there was quick establishment of around

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500 processing units in Rajasthan. There are more than 600 Guar gum manufacturing units in India with processing capacity of around 7-8 lakh tonnes annually of which only around 4.5-5 lakh tonnes capacity is utilized. One of the major reason for low level of capacity utilization is lack of demand from the industries. In fact the supply has exceeded the demand by entry of large number of new players as the industry appears lucrative.

Nature of Market

Market of the guar seed has witnessed a fluctuating market life cycle. The period of stable demand and supply followed by a record peak in price and shortage of supply have made guar market a very volatile during recent years.

The physical market for guar seed trading remains with Agricultural Produce Market Committees (APMCs) of the states. Mandi fee for Guar in Rajasthan is chargeable at the rate of 1.60%, while in Haryana it is 1.0%, in Gujarat- 0.50% and in Punjab there is no mandi fee chargeable on Guar. These markets have peak arrivals of guar seed in the month of November and December. The major channel for selling the guar seed is through commission agents who charges a prescribed brokerage of 2% as per APMC Act. Although AGMARK grades are defined, market is run by industry grade as defined by the traders. Due to the fact that the product has a very long storage life, most of the product purchased from the mandi by traders is released in a staggered way as per the demand for coming years. The price in the market (trader to miller) is influenced by the stock positions. Most of the traders store guar seed in their own storage structures instead of storing in accredited warehouses. Warehousing facilities for storage of guar seed is inadequate thus needs more storage structures to be built. The quality of the commodity is not maintained properly at the warehouses, and there should be strict regulations for the warehouses on quality issue. Also the benefit of pledge financing scheme is not reaching farmers and other stakeholders.

For packaging of splits processors use plastic bags and each bag contains up to 50 kg of splits. Guar powder is packed in paper bags and each bag contains 25kg of powder. Then these packets are being filled in the containers and each container consists of 800 packets. These processed products are being stored at the trader/ processor level by their own arrangements. The disclosure of current stocks and carryover stock in this situation is quite difficult and hence leads to speculation. It has been seen that at commodity exchanges the future trade of guar in year 2005-06 was to the tune of Rs. 299305 which was 242 times more than the actual value of Guar produced in the country. Although market forces determines the price in long run but the guar industry has witnessed high price fluctuations in the recent years.

The market is constraint by lack of transparency and market information. In spite of the fact that guar has assumed importance of stratospheric level, there is no systematic collection and dissemination of market information to the participants. The information requirement of industry to make a better decision are-

1) Area under cultivation and estimated production for a season2) Climate data for industry to estimate the supply from major production centers3) Estimated requirement of major importing countries and expected price in different markets4) Quality specifications for different countries5) Changes in international trade policies 6) Different application and specific grades accordingly

Farmers are aware of the prices prevailing in the market and refer to exchange prices while making a marketing decision. A consistent and reliable market information will help participants to make better decision.

The systematic collection of market information is required to be backed up by consistent efforts to disseminate market information to farmers and industry. The extension and advisory service also needs to be geared up to enable farmers, traders and processors to be able to make analyzed decision for present and future. Presently there is no dedicated organization performing task of collection and dissemination of market information to the stakeholders in public domain. However since the guar industry has largely driven by private players, they have their own individual mechanism of survey and collection of information of all kinds. Such discrete efforts needs to be consolidated to from a reliable mechanism of market information and advisor services. There is need of identifying national level institute as a nodal agency to facilitate the collection and dissemination of market information. As the importance of guar for the state of Rajasthan and country is well understood, National Institute of Agricultural Marketing is focusing on guar industry.

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Value addition and processing of Guar seed are the most important component of the market. There is lack of technology and Research & Development of products for specific guar gumused by the industries. Skilled man power in respect of growing food security concerns, still more than 40% export is contributed by raw material i.e., guar gum refined splits. Processing industry is fragmented and most of the units are small scale units. There is a greater need for consolidation to achieve economies of scale and a stable market for guar.

Future of Guar Market

The market of guar has witnessed a shift which was quite unexpected for the participants in the industry. The mean price of guar from 2007 to 2011 was moving around Rs. 2000/qt./qt. to Rs. 2100. But the high price fluctuations in the year 2012 the mean price of entire period (2007-2013) shifted to a new high at around Rs. 3600/qt. at Jaipur market. Mean price of last two year was around Rs. 7600/qt. In 2013 the price is moving towards stability with minor fluctuations.

In the year 2012-13, the export of guar split and gum from India to the world was around 3.3 lakh tonnes. It is estimated that the 20% of output of guar is being consumed within the country. The estimated total output of guar split and gum in the year 2012-13 was around 4 lakh tonnes. The compounded Annual Growth Rate of guar gum industry is estimated at 17.6%. Even if the industry grows with 15% CAGR, the expected size of the market in 2015 will be around 5.3 lakh tonnes.

The production of guar at commercial level has been started in many of the African countries which is expected to overcome the trouble caused to the industry due to fluctuations in the production in India. After the emergence of usage of guar in oil drilling industry, there had not been any new application emerged so far which indicates that the demand will be consistent without much fluctuations.

Though India accounts for 75-80% of the total guar produced in the world (60-70% is cultivated in Rajasthan) lack of technology on value addition diminishes the profits that can be earned from the crop. Lack of awareness among the stakeholders regarding the commercial value of the crop is resulting in under-exploitation of the crop for export. Meager efforts are made for stabilization of guar seed productivity in the country, since guar is not considered widely as a commercial crop. Countries like USA and Australia are making concerted efforts to grow guar seed extensively and thus production is showing increasing trend in those countries. This may lead to loss of international market for Indian guar gum products.

The future of guar industry is for specialized applications and derivatives. It is envisaged that the industry will move towards product differentiation to meet the specific and niche demand. For example- in food industry there is growing preference for bio-degradable, non-polluting and organic, products. This gives ample scope for leveraging investment, knowledge management, technology and partnerships for technology sharing and transfer.

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Chapter-3: Marketing and Supply Chain of Guar

Guar seed arrives in the markets in the month of November- December mainly. The part of produce (5-10%) is retained by farmers for seed, and animal feed purpose. The rest of the produce is sold in the market. The guar seed is mainly traded in Agriculture Produce Market Committees (APMC) of Rajasthan, Haryana, Guajarat and Punjab. The major markets are shown in Table 4.

Table-4: Major APMC trading in Guar Seed

State Mandi

Rajasthan Jodhpur, Bikaner, Sriganganagar, Hanumangarh, Churu, Sikar, Jaipur, Jaisalmer, Barmer, Nagaur, Nokha, Renwal

Haryana Adampur, Fatehabad, Hisar, Sirsa, Bhiwani, Ellanabad

Gujarat Kachch, Banaskanta, Sabarkanta, Mehsana, Patan, Ahemdabad

Punjab Bhatinda

The peak arrivals in the APMC are from October to December. The arrivals in market show declining trend from January to May.

Table-5: Peak and lean period of Guar Marketing

Jun Jul Aug Sept Oct Nov Dec Jan Feb Mar Apr May

Sowing Crop growth Peak arrivals Lean arrivals

According to Industry source there are more than 150 guar processing units in India, and the total installed capacity is more than 6 lakh tonnes per annum. There are two types of guar seed processing industries- processing of guar seed to guar powder and guar powder to guar gum. All the split units have indigenous plant and machinery and are mainly located in Jodhpur, Sri Ganaganagar and Bikaner districts of Rajasthan. The pulverized gum is largely sold as a commodity, and about 20% of the exports are still in the form of refined splits.

In regard to guar gum, although chemical analysis of different varieties is available and the processors could exercise preference for varieties with higher gum contents, but it is constrained by technical knowledge, machinery and resources as felt by industry to leverage the advantages of global market.

Guar Supply Chain

Guar seed is used for animal feed, extracting guar split, powder and guar gum. There are number of guar processing units in Jodhpur, Bikaner, Sri Ganganagar, Alwar and Jaipur of Rajasthan state, Bhiwani and Sirsa of Haryana state and Deesa, and Ahemdabad of Gujarat state. These units can be grouped into guar split manufacturers, and guar gum processors.

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Figure-9 shows the supply chain of guar split, guar gum and guar meal. As can be seen the stakeholders of Guar have integration of supplies. Split manufacturers procure guar seed either from village traders or from farmers in the mandi through commission agents (Fig-9). Another chain which exists in the market is direct sell by farmers to traders/ stockist through commission agents, and traders sell it to split manufacturers or guar gum processors. The commission agents take a brokerage of 2% from the buyers as per the act. Processors after processing guar seed into split either export directly or through exporters. Processors also sells guar split to the local gum processors. Similarly gum processors source guar seed either from village traders, farmers through commission agents, stockist/ traders, or they procure split from split manufacturers. After processing of guar seed/ split into different industry specific guar gum products, they export it and/ or sale to the domestic industries for further use.

Animal FeedFarmer

Producing GuarCommission

Agents in Mandi

Guar Split making Units

Trader/ Wholesaler

Guar Gum Treating and Pulverizing Units

Export

Guar Meal

Trader/ Wholesaler

Animal Feed Company

Retailer Animal Feed

Farmers/ Dairy

Fig-9:Value Chain of Guar India

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Industry Standards for Guar Products

The parameters for buying guar seed and split vary according to its usage and depends mainly on colour, shape and size. The industrial specifications for Guar Split and guar powder are shown in table below.

Table-6: Specifications for guar splits (Supreme Gums Pvt. Ltd., Jaipur)

Attributes Specifications

Gum Content 80-85%

Dehusked Splits 90% (Minimum)

Protein 5% (Maximum)

Ether Extract 0.6% (Maximum)

Ash 1% (Maximum)

Moisture 10% Maximum

Crude Fibre 1.5% Maximum

Degree of refining Double Refined

Guar Split

Dehusking requires sophisticated processing techniques as the price of the product depends on the splits meeting specifications laid down by buyers for moisture content, density, protein content, impurities and particle size.

Guar Gum

Guar gum can be further differentiated by specialized processing as highly refined guar gum is produced for the food ingredient industry, being used as a stiffener in soft ice cream, a stabilizer for cheeses, instant puddings and whipped cream substitutes as well as a meat binder. Low grade guar gum has applications in textile and paper manufacturing industry, oil well drilling industry, ore flotation and a number of other industrial applications. Specifications vary as per buyers’ requirements but mesh (particle) size, viscosity, pH and microbiological standard are some of the important attributes.

USA is the largest consumer of Guar gum with an annual consumption of about 2.2 lakh metric tonnes which constitutes about 25% of world trade.

Processing of Guar Seed

Guar Seed

The guar seed consists of three parts: the seed coat (14-17%), the endosperm (35-42%), and the germ (43-47%). The constituents of Guar seed are as shown in Table-7. It is from the endosperm that guar gum is derived, which is the prime marketable product of the plant. The pods are sun dried, manually separated from the seeds and the seeds are supplied to the industry for processing. Guar By-products, viz, Churi and Korma are used for Cattle feed.

Table-7: Constituents of Guar Seed

Part of Seed Protein % Ether extract % Ash % Moisture % Fibers % Types of Sugar

Hull (14-17%) 5 0.3 4 10 36 D-glucose

Endosperm (35-42%)

5 0.6 0.6 10 1.5 Galactomannon

Germ (43-47%)

55.3 5.2 4.6 10 18 Glucose

Guar Splits

When the polished endosperm are removed and separated from the fine layer of fibrous material a husk and refined Guar splits are obtained.

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Guar Powder

These refined splits are then pulverized and treated and processed using tailor made technology for specialty grade products for usage in industries specified. After pulverization, sieving is done to get the required mesh size i.e. fine, coarse, etc. and is converted into powder by a variety of means and processing techniques depending upon the desired end product.The Guar gum is mechanically extracted by roasting, differential attrition, sieving and polishing of Guar seeds. The sieved gum is then passed through the blenders to make it homogenous and later it is packed for marketing. The gum is refined to make yellowish white powder as per the quality specifications required by user industries and grades specified.

The specification for guar seed as per AGMARK standard are also prevalent for trade. The AGMARK standards and specifications are in Annexure-II.

The modern high technology units employ hammer /or Jet mills and other equipment’s using the latest techniques to produce powders with higher fineness, finer colloid formation, high water absorption and consistency. Especially gum powder is produced as per the requirement of Pharmaceuticals, Cosmetics and Food processing industries.

The Guar Gum: Refine Guar Splits are the sole raw material for manufacturing Guar Gum Powder for pharmaceutical and Food grade material. The properties of Guar Powder, which make it useful in various applications, are -

• Easysolubilityincoldandhotwater• Filmformingproperty• Resistancetooils,greasesandsolvent• Betterthickeningagent• Waterbindingcapacity• Highviscosity• Functioningatlowtemperatures

Fig-10: Processes in extraction of Gum

FEEDSTOCk OF GUAR SEED

Screened to remove extraneous material

Coarse milling, seeds broken in two halves carrying a part of husk and germ

Broken half seeds roasted in oil fired Rotary furnace, loosening of husk results

De-husking, screening or sifting (removed crude endosperm)

Husk and germ

Second screening and policing, about 98% impurities endosperm results (Purified guar split)

Residual removed

Tempered with 50% demonized water, and flaked with rollers. Flaked guar split with disrupted cellular structure results

Hammer or ultra-fine milling, guar gum powder

Sifting, screening and cycloning, commercial guar gum powder of different mesh sizes is obtained

Lab Testing

Packing and Storing

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Chapter-4: Price Movement of Guar

Factors Influencing Guar Price:

1. Rainfall during sowing and critical stages of growth

2. Area sown under the crop in major states like Rajasthan, Haryana, Punjab, Gujarat, etc.

3. Pattern of arrivals on a regular basis in markets like Jodhpur, Bikaner, Sriganganagar, Adampur, Bhiwani, Siwani etc.

4. Demand from millers or processors and export demand.

Introduction

Guar seed has shelf life of more than 3 years without losing out on any of its properties or qualities. It requires the barest minimum maintenance and handling environment. Therefore, traders or stockiest store this even for more than 6-7 years. Guar crop is mainly grown under rain-fed conditions therefore prices of guar seed as well as its derivatives very much depend on the monsoon condition and its likely production.

The prices are observed to be highly volatile during monsoon months. There is a good correlation between rainfall and production in Rajasthan as the guar crop is rainfed. The effect of rainfall on production is seen less in case of Haryana where Guar is a irrigated crop. The other factors like pattern of arrival, demand from millers and export also cause volatile price movement.

Fluctuation in Spot prices

The spot price of guar seed for the last 7 years i.e., from 2007 to 2013 reflects high volatility of prices. The Spot price at Jaipur market and Sri Ganganagar are analyzed.The price fluctuate highly during monsoon period i.e. July to October. Guar seed traded at Jaipur market between Rs 4000/qt. during Oct, 2012 to Rs 15000/qt. in the month of December, 2012. In 2013 the highest price at Jaipur was recorded in the month of January at Rs. 14400/qt. and lowest recorded was Rs. 4200/qt. in August. Highest fluctuation in prices of guar seed has been observed in the year 2012. During the year 2012, prices at Sri Ganganagar market ranged from Rs. 7752/qt. to Rs. 28556.2/qt.

Annual volatility (measured as Coefficient of Variation) in mandi prices of guar seed at different markets has been worked out and presented in Table-8.

Table-8: Volatility in Guar Seed Prices (C.V. in %)

Year

Rajasthan Haryana

Sri Ganganagar

Jaipur Hanumangarh Adampur Fatehabad Hissar

2007 5.5 6.0 5.9 6.0 6.7 6.9

2008 7.2 8.5 7.8 8.0 7.1 9.6

2009 20.9 19.3 22.0 21.1 21.5 20.2

2010 7.8 8.4 8.0 6.7 8.3 14.7

2011 29.4 50.6 36.1 28.1 29.5 25.4

2012 46.1 38.5 33.8 47.7 56.3 56.7

2013 29.2 39.5 28.3 24.5 23.5 56.6

Source: AGMARKNET

Results of the analysis reflect that there was high volatility in prices of guar seed at Hissar (56.7% and 56.6% in 2012 and 2013 respectively), Fatehabad (56.3% in 2012), Jaipur (50.6% in 2011), Adampur (47.7% in 2012), Sri Ganganagar (46.1% in 2012) and Hanumangarh (36.1% in 20011) markets, as indicated by the higher magnitude of CV in the respective markets.

The price of Guar seed ranged from Rs 4000/- per quintal to Rs 11000/- quintal at Jaipur market in 2013. While for the same period the price range at Sri Ganganagar was from Rs. 7752/- per quintal to Rs. 28556/- per quintal. In the year 2013 the ranges of price at Jaipur and Sri Ganganagar market were Rs. 4361/- per quintal to Rs. 11482/- per quintal and Rs. 5004/- per quintal to Rs. 11743/- per quintal respectively.

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The high price fluctuation in guar is mainly on account of higher fluctuation in area and production of guar seed depending on the spread and level of monsoon rainfall in the producing centers and the export demand of guar gum from the importing countries.

Futures Trade for minimizing Price risk

Futures trade in Guar seed started in the month of April, 2004 on NCDEX platform with the objective of price discovery and price risk management. Futures contracts for Guar Gum are traded mainlyon NCDEX platform. Futures trade in agri-commodities provides good hedging platform for the farmers, processors, exporters, etc in the value chain. The total value of output of guar seed is estimated at Rs 1,238 crore during 2005-06 (June – July), which has enjoyed a futures turnover of Rs 299,305 crore (242 times of guar output) during May 2005- March 2006.

Total value of guar seed and guar gum traded on NCDEX has continuously increased in the initial years and reached to the peak during 2006-08. In 2006 Guar seed and Guar Gum together contributed to 45% of total agricultural commodity traded at NCDEX and 37% of overall commodity trade of the exchange. The trend was continuing till 2008 as 39% of agricultural commodity trade was from Guar only. From the year 2009 the share of guar in agricultural commodity trade and overall commodity trade of NCDEX started declining. In the year 2010 the share of guar in total agricultural commodity trade of NCDEX was only 13%. Up to November 2013, the share of guar in total commodity trade of NCDEX is only around 9%.

Table-9: Volume of trade on NCDEX

YearGuarseed

(A)Guargum

(B)Total A+B

% of Agri trade at NCDEX

% of Total Trade at NCDEX

2004Volume 47154 2189 91314 13 11

Value 80526 10787

2005Volume 188721 7631 355099 6 5

Value 320154 34944

2006Volume 140957 3062 297534 45 37

Value 282287 15247

2007Volume 65042 1112 125814 44 38

Value 120669 5145

2008Volume 60372 839 115453 39 35

Value 111671 3782

2009Volume 90298 4271 220252 15 14

Value 199124 21128

2010Volume 109862 6690 290626 13 11

Value 255801 34825

2011Volume 89985 8590 453976 20 16

Value 352030 101946

2012Volume 3301 387 49296 20 19

Value 35311 13985

Note: Volume in 000’s Metric Tonnes and Value in Rs. Crores

The total quantity traded on commodity bourses was 88 times of total quantity of guar seed produced in the year 2004-05, 179 times in the year 2005-06, 146 times in the year 2006-07 and 53 times in the year 2007-08.

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Table-10: High –Low difference in Guar seed prices in India(Rs/Qt)

Year High Low Average Difference (H-L)

2004 1881.65 1002.8 1399.9 878.9

2005 2040.40 1358.3 1567.1 682.1

2006 2336.35 1560.6 1824.2 775.8

2007 1963.70 1744.1 1848.6 219.6

The high-low price difference after introduction of commodity futures in guar seed indicates that the spot price volatility of guar seed has decreased (Table-10).

Price Fluctuations due to Area, Production and Rainfall

The price of guar depends upon rainfall and area under cultivation of guar. The rainfall has more impact on price than production has. While with increase in area under cultivation the price decreases to a little extent.

From the Figure-11 it is clear that the rainfall and area under cultivation is moving in same direction while with

increase in area under cultivation price is decreasing.

Table-11: Impact on Spot Price of Guar due to variation in factors (in short run)

r 2 Between Rainfall Area Production

Price 51 (0.72) 25 (-0.50) 14 (0.37)

Here in case of correlation between price and rainfall, result obtained shows a positive relation. Here r^2 for between price and rainfall is 51, which means that 51% of the total variation in price can be explained by the linear relationship between rainfall and price. A good rainfall results in good seed quality which fetches better prices in market. The relationship between price and area has a negative correlation coefficient and the value of r^2 is 25 which means that 25% of the fluctuations in price can be explained by the linear relationship between price and area. The correlation coefficient for between price and production has a positive but very week association as 14% of the fluctuations in price can be explained by the linear relationship between price and production. Hence volatility in the price is a factor of climate and non-climatic parameters.

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Chapter-5: Guar Trade Scenario

Guar accounts for 18% of total farm exports which is at the value of Rs. 21287crores in 2012-13. This makes it as a second largest exported commodity after Basmati rice. The volume and value of the trade in 2012-13 are as stated below:

Table-12: Volume and Value of Guar Export in 2012-13

Product: Guar 2012-13 Percentage growth on

previous year

Percentage share in 2012-13

HsCode Product Qty (in Tonnes)

Value (in Rs. Crores)

13023230 Guargum treated and pulverised 2,63,245.45 17,756.19 22.59 83.41

13023220 Guargum refined split 70,515.23 3,390.54 76.29 15.93

13023210 Guar Meal 74,814.14 140.28 20.08 0.66

Total 4,08,574 21,287 28.83 100

Source: DGCI & S

There has been 76.29% growth in the value of guar refined split traded in year 2012-13. The value of trade of treated guar gum has also recorded a growth of 22.59% over a year. India continues to be a major exporter of refined split.

Although India is the biggest exporter of guar seed to US, the countries like Spain and Italy are continuously increasing their share in US market. Due to high demand of guar in world market and also the increasing price, Research and Development activities in these countries are aiming to obtain maximum benefit of the existing opportunities.

The main reason behind the near monopoly of India is due to production constraints in Italy, Spain, and UK etc. Fluctuation in production of Guar in India creates opportunity for many countries to capture the market share in world trade of Guar by undertaking research and development activities in production and processing sectors. Such efforts are already on progress in Australia, some states of USA, Sudan and South Africa etc.

The derivatives of Guar seed like guar gum and guar meal are being exported from India. Nearly 80 per cent of Guarsplit and guargumpowder produced in the country is being exported which fetches good amount of foreign exchange. The major markets are United States of America, China, Germany, France, Mexico, Argentina, Japan,

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Indonesia, etc.

Table-13: Major Exporting countries of Mucilages and Thickeners (HS code 13032)

2010 2011

Sr No.

Country Value %age share

Sr No.

Country Value %age share

1 India 628 60.21 1 India 1,218.00 73.07

2 Spain 86 8.25 2 Usa 92 5.52

3 USA 66 6.33 3 Spain 75 4.50

4 Italy 47 4.51 4 Pakistan 73 4.38

5 Pakistan 39 3.74 5 Italy 40 2.40

6 Germany 30 2.88 6 Germany 28 1.68

7 France 25 2.40 7 France 22 1.32

8 Morocco 20 1.92 8 China 19 1.14

9 Denmark 20 1.92 9 Denmark 17 1.02

10 Netherlands 15 1.44 10 Switzerland 16 0.96

11 Switzerland 14 1.34 11 Morocco 15 0.90

12 China 13 1.25 12 Netherlands 15 0.90

13 United Kingdom 10 0.96 13 United Kingdom 10 0.60

14 Portugal 6 0.58 14 Belgium 6 0.36

15 Belgium 5 0.48 15 Turkey 5 0.30

16 Japan 3 0.29 16 Philippines 3 0.18

17 Philippines 3 0.29 17 Russian Federation 2 0.12

18 United Arab Emirates 3 0.29 18 Sweden 2 0.12

19 Turkey 3 0.29 19 Japan 2 0.12

20 Austria 2 0.19 20 Portugal 2 0.12

21 Sweden 1 0.10 21 Poland 1 0.06

22 Norway 1 0.10 22 Australia 1 0.06

23 Australia 1 0.10 23 Austria 1 0.06

24 Czech Rep. 1 0.10 24 United Arab Emirates 1 0.06

25 Indonesia 1 0.10 25 Trinidad and Tobago 1 0.06

Total 1,043.00 100 Page Total 1,667.00 100

Source: - APEDA

Guar gum is classified under Mucilages and Thickeners group (HS code 13032) in harmonized system of classification in international trade. Mucilages and Thickeners includes derivatives of Locust bean, Locust bean seeds and Guar Seeds. India is the largest exporter of guar gum and mucilages with 73% share of world mucilages and thickeners trade, followed by USA (5.5%), Spain (4.4%), Pakistan (4.3%), Italy (2.3%) and Germany (1%) (Table-13). Countries like USA, Spain, Italy, Germany, etc. imports guar refined split from India and process it into industry specific guar gum products and re-export it.

Major importing countries of guar gum or mucilages and thickeners group is USA with about 62% of total world

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mucilages and Thickeners import followed by Germany (6%), Canada (4%), China(2.8%), Italy (2.5%), etc. (Table-14).

Table-14: Major importing countries of Mucilages and Thickeners

2010 2011

S. No.

Country Value Share (%)

S. No.

Country Value Share (%)

1 USA 547 55.70 1 USA 1,003 62.88

2 Germany 71 7.23 2 Germany 101 6.33

3 United Kingdom 33 3.36 3 Canada 65 4.08

4 Japan 31 3.16 4 China 46 2.88

5 France 30 3.05 5 Italy 40 2.51

6 China 29 2.95 6 Japan 39 2.45

7 Canada 28 2.85 7 Denmark 30 1.88

8 Russian Federation 28 2.85 8 France 28 1.76

9 Denmark 27 2.75 9 Russian Federation 27 1.69

10 Italy 24 2.44 10 United Kingdom 22 1.38

11 Rep. of Korea 16 1.63 11 Mexico 21 1.32

12 Mexico 13 1.32 12 Netherlands 19 1.19

13 Australia 12 1.22 13 Australia 18 1.13

14 Netherlands 12 1.22 14 Belgium 16 1.00

15 Belgium 11 1.12 15 Brazil 15 0.94

16 South Africa 10 1.02 16 South Africa 14 0.88

17 Brazil 10 1.02 17 Argentina 12 0.75

18 Spain 8 0.81 18 Indonesia 11 0.69

19 Thailand 8 0.81 19 Thailand 11 0.69

20 Poland 8 0.81 20 Spain 11 0.69

21 Switzerland 6 0.61 21 Switzerland 10 0.63

22 Argentina 6 0.61 22 Poland 10 0.63

23 Austria 5 0.51 23 Austria 10 0.63

24 Turkey 5 0.51 24 Rep. of Korea 9 0.56

25 Malaysia 4 0.41 25 Malaysia 7 0.44

Total 982 100 Page Total 1,595.00 100.00

Source:- APEDA website.

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Table-15: Export of Guar gum from India to USA and World

GUAR GUM EXPORT from India Share of USA in total export

Valueof Guar Gum from India in (%)

YEAR To USA To World

Quantity (ooo’MT)

Value (Crores)

Quantity (000’MT)

Value (Crores)

2002-03 49 227 112 486 47

2003-04 45 196 121 508 39

2004-05 54 286 131 689 41

2005-06 75 466 187 1049 44

2006-07 67 441 189 1126 39

2007-08 82 484 211 1126 43

2008-09 97 623 259 1339 47

2009-10 72 468 218 1133 41

2010-11 215 1,777 442 2939 60

2011-12 434 12,446 707 16524 75

2012-13 245 17,282 409 21287 81

Source: APEDA

Exports of guar gumis continuously increasing with the annual compound growth rate of 17.6% in quantity terms and 40.6% in value realized. The major items of export among guar products are Guar Gum Treated and Pulverized followed by Guar gum Refined Split and Guar meal. Total quantity of guar gum exported from India was about 409 thousand MTvalued at Rs. 21287 crores during 2012-13. Export of guar gum from India to USA has also increased in both quantity as well as value terms. The compounded annual growth rate (CAGR) of export of guar gum form India in quantity terms has been recorded at 21.6% from 2002-03 to 2012-13 and the CAGR for value of guar gum exported to USA for the same period is 49.32%.

Exports of Guar Derivatives from India

Nearly 75-80% of the Guar Gum or other derivatives of Guar seed are being produced in India and are exported mainly to USA and European countries. The value added derivatives of Guar seed are used by the various industries in India as well as abroad. Pakistan, Sudan and parts of USA are the other major Guar growing countries which produces nearly 20% of world guar seed production. The derivatives of Guar seed like guar refined splits, guar gum powder and guar meal are being exported from India. Nearly 80 per cent of Guar gum and split produced in the country is being exported which fetches good amount of foreign exchange.

Table-16: Export of Guar Derivatives from India.

HsCode Product 2010-11 2011-12 2012-13 Growth percentage

over an year

Percentage share

in 2012-13Qty Value Qty Value Qty Value

13023230 Guargum treated & pulverised

3,17,171 2,366 5,24,751 14,484 2,63,245 17,756 22.59 83.41

13023220 Guargum refined split

83,011 508 1,02,424 1,923 70,515 3,391 76.29 15.93

13023210 Guar Meal 41,425 65 80,152 117 74,814 140 20.08 0.66

Total 4,41,607 2,939 7,07,326 16,524 4,08,575 21,287 28.83 100

Source: DGFT Note: Quantity in Tonnes and value in Rs. Crores

27

The export composition of guar derivatives shows that export of refined guar splits was 15.93% and guar gum treated and pulverized was 83.41% in the year 2012-13 (Table-16). The proportion of refined guar split, an intermediate product, has dropped to 30% of total guar derivatives export from the country, but still a sizeable quantity of exports is contributed by this raw material used for processing into different industry specific guar gum products. The major share of the guar processed in India is exported either in form of semi processed product i.e. refined splits or in form of guar powder.

Per unit value realization from export of split and gum pulverized indicates that export of guar gum treated and pulverized fetches about 25% - 30% higher income to the country compared to export of Guar refined splits. Considering 5-10% increase in cost (as discussed with processors) of processing splits to gum powder it is viewed that 15-20% net income can be achieved.

India is the leading exporter of guar gum. The major importing countries of Indian guar products are E.U, United States of America, China, United Kingdom, South Africa, and Japan. In 2012-13, the top importing countries were U.S.A. with 2,44,829.0 MT China with 32,268 MT, Germany with 12,085 MT, Canada with 5467.0 MT, Russia with 5,389 MT, Australia with 3,959 MT, Italy with 12,651 MT and Netherlands with 3,644 MT. The country exported about 4,08,574 MT of guar gum during the year 2012-13 as compared to 7,07,326.43 MT in 2011-12.

Export of Guar Refined Split to Major Countries from India

Guar refined split is manufactured from guar seed and is an intermediate product used for processing and producing different industry specific guar gum products. USA continues to be the major importer of guar refined split, followed by china, Switzerland, Netherlands, Belgium, Pakistan, South Africa, etc. During 2006-07, China emerged as largest importer of guar refined split, according to trade sources China imposes import duty to the tune of 15% on import of Guar gum and import of guar refined split is free. Thus, China is encouraging import of intermediate product, process it into different industry specific guar gum products and re-export it. Similarly all other countries who are importing guar refined split in bulk from India process it and re-export the finished product.

The export of refined guar split has increased mainly to USA and China. These are the countries acquiring strength in the processing of guar split to the value added guar gum and other industry specific products. China and USA now started exporting value added products to other countries. The main demand of guar seed originates from the US petroleum industry and also the oil fields of Middle East. The major markets are United States of America, China, Germany, United Kingdom, Spain, UAE, Belgium, Austria, etc.

Export of Guar Gum Treated and Pulverized to Major Countries

USA continues to be the largest importer of Guar gum from India with an annual import of more than 2,44,829 MT presently which represents 60% of total guar gum exports of India. China & Germany are the other major importers of guar gum from India with more than 32,268 MT and 12,085 MT of annual imports respectively from India, which accounts for 7.8% and 2.9% of total guar gum export from India. Other major importers of guar gum are Italy, South Africa, Russia, Australia, Netherlands, Japan, Brazil, Belgium and Canada. Presently India exports guar gum to more than 90 countries.

Guar in EXIM Policy

The Harmonized System (HS) classification with code 130232 is mucilages and thickeners derived from locust bean seeds or guar seeds. This includes guar meal (which is a byproduct of guar processing industry mainly used for animal feed industry, is in no any case have thickening and binding properties), guar gum refined split (an intermediated product derived from guar seed and used for processing into different industry specific guar gum products, is a raw material for guar gum industry for further processing), and guar gum treated and pulverized (the final product of guar processing).

28

Table-17: Customs duty on Guar and its derivatives

Exim Code Item Description Customs Duty (%)

07133910 Guar Seeds (From 01-03-2013) Customs Basic Duty: 30

Addl Duty(CVD): 0

Spl Addl Duty(Spl.CVD): 0

Excise Cess

Customs Cess 3

130232 Mucilages and thickeners, whether or not modified, derived from locust beans, locust bean seeds or guar seeds:

13023210 - Guar meal (From 01-03-2013) Customs Basic Duty: 30

Addl Duty(CVD): 12

Spl Addl Duty(Spl.CVD): 4

Excise Cess

Customs Cess 3

13023230 - Guargum treated and pulverized (From 01-03-2013) Customs Basic Duty: 30

Addl Duty(CVD): 12

Spl Addl Duty(Spl.CVD): 4

Excise Cess

Customs Cess 3

13023230 - Guargum treated and pulverized (From 01-03-2013) Customs Basic Duty: 30

Addl Duty(CVD): 12

Spl Addl Duty(Spl.CVD): 4

Excise Cess

Customs Cess 3

Source: Exim Policy, Government of India

Benefits under VkGUY

Exports of agricultural produce, minor forest produce and village and cottage industry products would be awarded duty free scrip @ 5% of the FOB value of exports under the Vishesh Krishi and Gram Udyog Yojana (VKGUY). In order to promote indigenous sourcing, a built-in incentive has been introduced under the VKGUY for exporters utilizing domestic raw materials for export production. Earlier the overall subsidy used to be 6% composed of 5% credit in VKGUY and 1% duty drawback for export oriented unit (EOU). Out of this 5% of subsidy under VKGUY has been revoked for guar gum and guar meal and 1% drawback is still available. Guar gum (Split and Powder) has been added in the list of focus product scheme (FPS) where 2% benefit is available on FOB value of exports. However guar meal is not included in this list.

29

Table-18: List of items covered under Minor Forest Produce

Product Code

ITC HS Code

Description Date of export from which benefits will be admissible

130232 Mucilages and thickeners, whether or not modified, derived from locust beans, locust bean seeds or guar seeds:

8.44 13023210 Guar meal 01.04.2004

8.45 13023220 Guar-gum refined split 01.04.2004

8.46 13023230 Guar-gum treated and pulverized 01.04.2004

Guar refined split is a raw material for processing into guar gum powder, and through this VKGUY scheme the export incentive is also going for export of an intermediate product or raw material. This matter should be looked into and export of raw material should not be incentivized.

31

Chapter-6: Research and Development Efforts in Guar

Production Research

All India Coordinated Research Project on Arid Legumes including research in Guar as a mandate is the only research effort towards guar crop in the country. The progress in research and development have been made at CAZARI, Agriculture Research Station (ARS), Durgapura, and CCS Haryana Agricultural University. R&D efforts have focused to produce good quality seed of notified varieties of guar. The scientists are also developing extra early maturing variety. The R&D efforts coupled with training to the farmers for quality seed production is paving way for integrated lab to land transfer of technology.

ARS Durgapura under Rajasthan Agricultural University, Bikaner has developed eleven varieties of Guar seed with the main thrust on research in the areas of:

1. Breeding genotypes with early maturity, in built multi-stress tolerance towards drought, heat, salt and field resistance against important diseases and pests.

2. Breeding guar for high galacto-mannan content (>35%), improved meal quality and high seed protection content (25-27%) with increased proportion of essential amino acids in guar. Development of Photo thermo-insensitive varieties of guar.

3. Enhancement of breeder seed production to cater to the needs of high replacement rate annually in guar.

4. Ensure adoption of new technologies through frontline demonstration at farmer’s fields.

5. Expansion of guar cultivation in non-traditional areas.

Table-19: Promising Varieties of Guar developed at ARS, Durgapura.S. No.

Variety Year of Notification

Maturity Duration

(Days)

Yield Potential (q/

ha)

Area of Adoption

1. Durgajay 1980 110-120 8-10 Rajasthan & Haryana

2. Durga Safed 1980 110-120 10-12 All guar growing areas of India

3. RGC-197 1990 110-120 10-12 All over the country. Most suitable for mixed and inter- cropping.

4. RGC-471 1991 110-120 10-14 Rajasthan suitable for fodder grains and green manuring

5. RGC-936 1991 85-90 8-11 Draught prone areas of Rajasthan, Haryana & Gujarat

6. RGC-986 1999 110-115 18-19 Good soils of Rajasthan with partial irrigation facility

7. RGC-1003 1997 85-92 12-15 All over India well suited under well drained & coarse textured soils

8. RGC-1002 1999 80-90 8-12 Arid & Semi- arid tracts of India

9. RGC-1017 2001 92-99 10-14 All over guar growing areas

10. Durgabahar 1985 First picking 45-50 days after sowing

70-75 green pods

All over India for vegetable purpose

11. M-83 2000 45-45 days 80-90 green pods

Suitable for summer and Kharif in Rajasthan

12. Rajasthan Guar – 1038

2009 101-105 10-11 Rajasthan, Maharashtra, Haryana, Madhya Pradesh, Uttar Pradesh, Gujarat under Rain fed kharif and Zaid seasons

Source: Chaudhary, 2004 &HAU, Hisar

R&D works at CCS Hissar Agricultural University

It was observed through the discussion held with stakeholders that varieties like RCG 1017, RCG 1002, HG 365, HG 563 are the best varieties of the below mentioned varieties of guar developed but the major problem is non-availability of seed and poor extension support system for guar production in the country.

32

Table-20: Varieties released by CCS HAU

Name of crop/ variety

Av. Yield q/h

Growing conditions

Gum % Viscosity (mpas-1)

Salient features

Guar: Grain purpose

FS-277 6.0 timely sown 29.58 Erect, unbranched.

HG75 8.0 Do 30.76 1932 Branched, high yielding, bushy, BLB tolerant.

HG182 8.0 Do 30.52 Branched, high yielding, pubescent little serrated.

HG258 8.5 Do 29.10 Branched, pubescent, smooth, short leaf margins, resistant to diseases.

HG365 8.0 Early sown 31.51 2992 Branched, dwarf, serrated leaves, early and suitable for intensive cropping.

HG 563 30.92 3903

HG 870 31.34 3702 Identified

HG 884 29.91 2568 Identified for All India

HG 2-20 30.26 2749 Identified for All India

Guar: Fodder purpose

HFG-119 325.0 Timely sown Broad, dark green leaves, moderately resistant.

HFG-156 350.0 Do Tall, branched, tolerance to diseases.

Source: CCS HAU, Hisar

Table-21: Quality Seed Production during 2009-10 at CCS HAU, Hisar (in quintals)

Crop Nucleus seed

Breeder Seed

Foundation seed

Certified seed

TFL seed

Total Seed

Guar 1.2 64 133 155 188 541

Current Progress

One hundred and thirteen guar germplasm lines were grown and the genotypes GP 10, 12, 13, 54, 60, 63, 76, 81, 92 were found promising. Genotype HG 100 at Hisar was better yielder in AVT-II whereas, HGS 08-1 at Hisar and CAZG-08-02 at Bawal in AVT I and HGS HGS 03-52 and CAZG-09-2 at Hisar while GGS 13 and GR 35 at Bawal in IVT were found promising. In LST, genotypes IC 116454 X Kiran (F7), HGS 2-7 and HG 2-29 were found to be higher yielder than the checks. On Farm Trials were conducted at different locations of the state. On overall mean basis the newly developed, released and notified variety, HG 2-20 gave about 6.72% increase over HG 563. (2009-10)

Agricultural Scientists have made efforts for developing New Guar varieties with better characteristics like higher gum content, disease resistance, more productivity and mainly the thermo-photo-insensitive varieties of Guar which would be suitable for non-traditional areas and for cultivation in the summer. Genotypes with high gum contents have been given in Table- 22.

R&D Efforts and Industrial Requirement

The three main issues facing the guar gum industry in India today are:

- Inadequate crop size,

- Fluctuating yield per hectare, and

- Sub-optimal guar cultivation in non-productive arid regions.

Therefore the R&D project is felt essential to lift Indian guar exports in a big way, as it is now shackled by low yield and low quality.

33

Table-22: Genotypes with high gum content (>35%)

Sr. No. Germplasm Gum (%)

1. DG8 35.35

2. GP147-48-01 35.70

3. SPSG96 35.70

4. IC116616 36.23

5. IC116709 36.75

International Experiences

The production and processing research efforts are continuously being made in various countries. These efforts are directed to develop early maturing varieties with better gum quality, tolerant and pest resistance etc.

Production Research Australia

Approximately 400 lines of guar have been introduced into Australia and more than 100 of these have been included in field trials. The strongly branching varietiesBrooks and ECR67 and the sparsely branching CP177 have been commonly used for research in Queensland. Seed yields of up to 4 tonnes/ha have been achieved. Up to 35% gum yields have been produced, but this level is dependent on both variety and environment.

Production Research Pakistan

Guar has remained a minor crop until the recent past. Now it seems destined to assume a large role among the domesticated plants that supply the food and needs of human beings. It is well adapted to semi-arid and arid regions of Pakistan but 80% of the crop is grown under irrigation. Soils with pH of 7.0 are better suited for guar production. It is also tolerant to salinity.

Production Research United States

Contract guar acreage in the Texas South Plains and surrounding areas was about 30,000 acres in the year 2000. In the last 20 years 15,000 to 40,000 acres of guar has been grown in the Vernon, TX, area with some across the Red River in Oklahoma. Processing plant for field guar in the U.S., Rhodia, Inc., in Vernon mostly process guar endosperm from India and Pakistan.

Guar is a minimal input crop and the cost of production is very less. Some fields with irrigation have developed Alternaria and bacterial blight. Rhizoctonia is also a potential problem in heavily irrigated guar. Guar midge has been an occasional problem in the past in the Vernon area.

Production Research Sudan

Guar is a new crop in Sudan, and is grown commercially to limited scale near Singa, Blue Nile, for seed processing into flour. Research for new varieties of guar is presently done in EL Fasher Research Station and University of Bahri, Khartoum, Sudan. The efforts are for developing varieties to improve yield with good gum properties and to check toxicity for its food grade application.

35

Chapter-7: Issues and Challenges in Guar Industry

Major issues and stakeholders view for guar industry

With the extensive stakeholder discussion/ consultation, interviews conducted by NIAM research team on various points of interactions the key insights of guar industry are summarized below:

Table-23: Research and Development in GuarSub theme Issues and Challenges Recommendation/ requirements

RES

EAR

CH A

ND

DEV

ELO

PM

ENT

Enhancement in Area, production and yield of guar

Low yield of guar in non-irrigated area is key concerned.

More area should be brought under cultivation / high yielding variety to be provided to farmers.

Development of varieties as per the market demand/ industry needs

High gum content and High viscosity varieties will help industry and application

High gum content and high viscosity varieties (like HG 365) to be developed.Involvement of Industry

Development of drought, pests and diseases resistant varieties

Being a food additive, use of pesticide / insecticide in guar is not desirable.Crop failure due to drought is frequent

- Diseases resistant variety of guar is to be developed.- Short duration (60-70days) and Drought resistant

varieties are required

Farmer sustainability and profitability

- Lack of knowledge / technology at Farmers end to boost production.

- Poor extension of production technology

- Technology inputs to be provided to farmers like, high yielding seed, pest management, harvesting, storage etc.

- Farmer industry linkage through direct marketing and contract farming will improve profitability

- Agro technology extension will increase productivity Farmer access to technology and inputs

Poor technology and input access to farmer

Technology inputs to be provided to farmers like, high yielding seed, pest management, harvesting, storage etc. Guar R&D centre is required to develop and extend the technology and varieties to farmers

Funding bases for breeding and breeders Rights (IPR)

To be Funded by govt. as commodity is earning foreign exchange.Negligible involvement of Guar industry

IPR to be given to breeders.

Value drivers for Research and Development

Value added products will help all stockholders of industryNegligible industry – research linkage

1) Hydrolysed guar for dietary fiber use.2) Cationic guar for personal care use.3) Hydroxypropyl guar for construction, personal

care, oil field uses4) Odorless and tasteless guar for food use.5) Development of HYV / viscosity for fast hydrating

guar.6) Organic guar (certified).7) Removal of odor of guar meal and its use as a

protein supplement for human consumption. 8) Research – industry linkage to be strengthened

Seed replacement ratio, farmers access to HYV seed

- Farmers generally use own produce or buy guar from other farmers from village and use as seed, seed replacement ratio is below 10%.

- Availability of HYV seed and quality of seeds to farmers is major issue

- Development of required varieties and extension is required for quality production, better productivity and farmer income

- Seed multiplication and timely availability in market by Agri. Univ/ State Seed Corporation is required

Source: Sharma Purshottam, 2012, Reforming Guar Industry in India: Issues and Strategies

36

Table-24: Marketing Infrastructure for Guar

Sub theme Issues and Challenges Recommendation/ requirements

MA

Rk

ETIN

G I

NFR

AST

RU

CTU

RE

Transportation - Long distances to port of exports

- Need significant improvement

- Hinterland ICDs to be developed nearer to the manufacturing locations;

Indian Railways to give special consideration to the trade

Storage and warehousing

Lack of warehousing in rural areas

- Warehousing corporations / pvt developers to take the lead

- Training to stockholders

- Needs infrastructure for cleaning and grading in market yard

Quality certification Non availability of Accredited Labs. in the processing hubs of guar;

Lack of national food data, norms;

Certification agency for food/ different application

For food grade guar gum exporters, HACCP is mandatory. But guar gum industry is not regulated by govt. In my view, guar, being a food additive and export potential, it should be regulated by govt. agency like, PFA and industry should follow GMP.

- Quality certification lab

- Food laws as per E.U./ Foreign countries;

Marketing policies - Direct marketing arrangements at mandi yard

- Promotion of Contract farming in Guar

- Specify place for direct marketing at each market yard

- Help in farmer industry linkage for contract farming

Improvement in efficiency and effectiveness of supply chain

- Price sensitive commodity

- Long supply chain resulting high procurement cost for industry and low price to farmers

- Transportation;

- Easy availability of containers

- Price stability can bring improvement in supply chain.

- Direct marketing and contract farming should be promoted

- More Hinterland I.C.D.s;

- Enhanced Railway network/ infrastructure to swiftly carry the containers to port

Farmer access to market

Information of prices is not available with farmers

- Easy way of information dissemination

- Commodity Futures Exchange price discovery helps farmers to get good price.

Marketing charges and fees

No issue Local taxes like mandi tax etc are being charged.

Taxation (Sales tax, VAT, etc)

No issue VAT is exempted on guar.

State entry tax is different across, needs harmonization

37

Table-25: Processing and Exports

S. No.

Sub theme Issues and Challenges Recommendation/ requirements

PR

OCE

SSIN

G

AN

D

EXP

OR

TS

Availability and gap in the processing technology and up-gradation requirement

- Process / technology gap in value added products

- Splitting technology – Yield and viscosity traits;

- Pulvrising technology

- certain chemical application like cationic guar, HPG guar

- Either import of process and technology or development of our own process /technology.

- Techno centre be developed on a national /state level to identify and make available the technology;

- Export promotion council to assign techno studies to international agencies

Capacity utilization of the available processing infrastructure (Gap and enhancement)

Sufficient capacity is available to meet export requirement.

Capacity enhancement is being undertaken by industry to meet market demand well on time.

Problems faced by the exporters in export of guar derivatives

- Major problem faced by exporter: PCP test by Vimta lab/ endorsement by SHEFEXL as per notification of govt. to Europe bound shipments.

- Technical know how

- Testing facilities

Exporters are suffering a lot as it takes more than three weeks to get this report and govt. endorsement.

- Tech know how – support required

- Well equipped Testing lab be established near to manufacturing area;

Challenges from alternatives to guar gum

Locust bean gum, starch, cellulose

Explore use in other industries, development of new products

Efficiency & cost effectiveness of processing industry

- Very competitive industry

- Less efficient machineries but cost effective because of its export market demand at present

- Being a commodity, whole industry is cost effective.

- Efficient and cost effective machinery for processing is required

- Advanced milling technology be found out suitable for the process

Source: Sharma Purshottam, 2012, Reforming Guar Industry in India: Issues and Strategies

38

Table-26: Export and Industry promotion for Guar

S. No.

Sub theme Issues and Challenges Recommendation/ requirements

EXP

OR

T A

ND

IND

UST

RY

PR

OM

OTI

ON

Certification issues for export

HACCP, ISO 9000, ISO 22000, HALAL and Kosher certificates are required for food grade guar

- Time consuming

It should be made mandatory for food grade guar industry to have these certificates or this industry should be regulated by govt. agency like PFA

- Regional laboratories, certification agencies required

Government policies to enhance export of Guar products

- Govt. has already extended some policies to enhance export of guar, viz. VKGUY and DEPB

But guar splits are intermediate product and export of processed & finished product is encouraged, guar splits & meal do not qualify for HS 130232-Mucilages and Thickeners

- Neutralization of taxes to reduce the transaction cost

- These policies should continue to help exporters for growth of industry and value addition

- Re-classify HS 130232, only Guar Gum Treated and Pulverized qualify for this, VKGUY benefits not to be given for Splits.

Special assistance for adoption/ import of advanced technology

Choice drivers for current/ emerging markets

- China is emerging market for guar gum industry.

- Development of markets in developing countries to reach the customers directly

China has nil duty on guar split import from India and however imposed import duty @15% on guar gum powder from India to have value addition in China. Therefore, Indian govt. should imposed duty on guar split @ 15% and part of this money to be spent on guar gum R&D.

Source: Sharma Purshottam, 2012, Reforming Guar Industry in India: Issues and Strategies

39

Table-27: Price and Market Intelligence

S. No.

Sub theme Issues and Challenges Recommendation/ requirements

PR

ICE

AN

D M

AR

kET

INTE

LLIG

ENCE

Volatility in prices of guar seed and guar gum

Price volatility is a major issue face by guar industry.

Commodity Futures Exchange price discovery mechanism has supported industry to reduce price volatility partly. But more transparency is required to reduce price volatility, viz. computerization of mandi record / sowing records, storage record etc.

Commodity futures trading and guar industry

Additional and transparent mechanism for price discovery and advance price signals

- Trading on Commodity Futures Exchange to be continued.

- Capacity building of all stakeholders on hedging is required

- Increase hedging and control excessive speculation

Price discovery mechanism

Based on Demand and supply

Through Commodity Futures Exchange, better price discovery is ensured.

Shaping of market influences/behavior

Monsoon trend,

Crop acreage;

Harvest size

- More transparency is required.

- Buffer carryover can be maintained to moderate prices and maintain supply

Market intelligence on trends & new product requirements / preferences- their impact on guar products requirement

- Sufficient market intelligence is not available to farmers and other stakeholders

- Dissemination of information to grass root level

- Agency should be their for creation and dissemination of market intelligence;

- Close rapport between the user of the product and the manufacturer/ exporter

Access to signals of producer/ consumer market

Limited but Enhanced after commodity futures in guar seed

- Information dissemination to farmers to be ensured

- International benchmarks be identified which affect guar markets and regular dissemination of market info on these benchmarks

Source: Sharma Purshottam, 2012, Reforming Guar Industry in India: Issues and Strategies

40

Table-28: Guar Industry Value ChainS. No.

Sub theme Issues and Challenges Recommendation/ requirements

GU

AR

IN

DU

STR

Y V

ALU

E C

HA

IN

Supply Chain: from input suppliers to farmers and to the end users of guar products

- No direct link between farmers and the manufacturer

- High viscosity (HYV) seeds are mixed with normal variety.

- Long supply chain

- Certified HYV seed to be kept and stored separately. To be used for value added product.

- Contract farming may be one of the options- Product specialization according to user industry

Farmer’s access to knowledge, resource and profitability to farmers

Lack of knowledge of farmers about guar

More training to be imparted to farmers. In Rajasthan and Haryana, there should be govt. farm house to impart training on this type of cash crop.

Sourcing of Guar and other raw material and its role in enhancing returns to farmers

If contract farming and direct market arrangements are made, will help farmers getting assured market and better price & industry to be competitive

Value addition in each stage of guar processing and marketing

Good scope for value addition at each stage

- Support is required at each stage.- Export of raw material (splits) should be discouraged

Industry response to give farm viability and sustainability

Link missing - A direct link with the farmer is required with the industry

- This crop requires very less inputs and being a legume crop, nitrogen is fixed up in soil for better return in terms of high yield of next crop.

Demand No issue - Industry is growing 6-8%/ annum- Identification of more usages/ applications;- Research and developmentIdentification of new markets

Identification of new market opportunities

New application of guar / ChinaAction oriented plan

R&D institution for Guar seed production and processing technology development and dissemination is required, capacity building of fragmented industry particularly for food safety aspects is required

GU

AR

IN

DU

STR

Y V

ALU

E C

HA

IN

Understanding of demand, guar types (varieties) and production requirement

- Difficult to understand- Absence of know-how

with the Industrialists on various types/ varieties of guar seed

- Every application demands new sets of properties; products are tailor made as per customer requirement.

- Dissemination of information and tech on various varieties of guar seed to the processors

What are the emerging sources of demand

New uses like building, ceramics etc

Technology is required to tap these emerging markets.

Demand for specialized labour, professional advise service and technical support as part of farm/ industry viability and sustainability

- Shortage of trained manpower in industry

- Lack of know-how and specific courses on technology, product bio chemistry like hydrocolloids, polymer technology

- Need to develop trained / skilled manpower by imparting technical training.

- Guar industry is small and fragmented requires capacity building mainly on food safety aspects;

- Specific streams of courses/ specialization be enacted relating to hydrocolloids, polymer techno etc

Industry Scales and Scope

Size of industry Being a commodity, scale will play key role to make it sustainable in long term.

Impact of WTO/ trade rules

Access to various markets Reasonable access to various markets of the world

Source: Sharma Purshottam, 2012, Reforming Guar Industry in India: Issues and Strategies

41

Table-29: Guar industry associations/ representation

S. No.

Sub theme Issues and Challenges Recommendation/ requirements

GU

AR

IND

UST

RY

ASS

OCI

ATIO

NS/

R

EPR

ESEN

TATI

ON

Governance and representation of grower and other stakeholders in the interest of guar value chain

- Very poor representation from farmers.

- Size of farm holdings or big size cooperatives are missing which can take the plantation of guar on an industrial scale

- All guar growing districts should have proper representation.

- Stake of growers can be increased in case they come in adequate size

Roles, leadership quality, skills, competencies, decision structures

- Associations are not very effective and require change for growth of industry.

- Participation of small and medium size industries and farmers cooperatives is missing

For the growth of entire guar industry, there should be sub –groups at each level and then it should be coordinated by a nodal agency to frame rules / std.

GU

AR

IND

UST

RY

ASS

OCI

ATIO

NS/

REP

RES

ENTA

TIO

N

Community factors/ impacts

- Very less participation

- Regional factors strongly manifested

- To be strengthen.

- Balanced approach should be taken in national interest

Regionalization and consolidation to match these efficiencies

Missing Regional chapters of the associations be carved out;

Requirement of internationally sustainable and commercially competitive guar industry development

Due to contamination of PCP in food grade guar has damaged image of whole industry and some plants in un-organized sectors really need improvement

This industry need to be regulated by a competent govt. agency to sustain on long term basis.

Requirement of whole-of-chain industry body to address fragmentation and redefine roles

- Very much required

- To be aware about the regional disparities and a wholesome approach

- R&D institution looking all aspects (right from production to export) of guar is required

- A national approach be devised to rectify the gaps and fragmentation

Source: Sharma Purshottam, 2012, Reforming Guar Industry in India: Issues and Strategies

42

Table-30: Sustainability and Diversity in Guar Industry

S. No.

Sub theme Issues and Challenges Recommendation/ requirements

SUST

AIN

AB

ILIT

Y A

ND

DIV

ERSI

TY

Subsidies (visible/ other)

Not required

Trade barriers - High import taxes by China on gum powder discouraging import of finished product, low import tax on splits encouraging import of raw material

Discourage export of raw material

Research and Development base

Very poor on processing of guar seed

Extensive research is required for processing and development of derivatives

Funding bases for breeding

Govt. should imposed export duty on guar split

Revenue from export duty to be used for this purpose.

Segmentation and traceability capabilities required for an internationally competitive guar industry

Industry is fragmented Consolidation is required.

Cooperatives of large size to be developed and identified;

Commercial lots to be defined;

Trading systems/ processes and decision structure

No issue Reasonable

Table-31: Risks in Guar Industry

S. No.

Sub theme Issues and Challenges Recommendation/ requirements

IND

UST

RY

RIS

k

Financial- level, type, scale, process and demand

Fluctuating prices cause concern

- Capacity of stakeholders may be enhanced on risk management (hedging) through commodity futures

- Good knowledge about the product and user base will enhance scale, demand and process capabilities

Risk in terms of Competition, supply, technology access/ failure

Technology for value added products are needed.

- Govt. should support R&D funding to encourage technology development.

- Strengthening of the infrastructure, technology, product quality will reduce chances of failure

- Crop Insurance cover to farmers for Guar crop is urgently required

Environmental risk Biodegradable Eco-friendly

Source: Sharma Purshottam, 2012, Reforming Guar Industry in India: Issues and Strategies

43

List of Tables

Table No.

Table Name Page No.

1 Application-wise global consumption of guar derivatives 5

2 Share of Districts in Total Production and Area of Rajasthan 9

3 Relationship between Area,Production,Yield with Rainfall 10

4 Major APMC trading in Guar Seed 15

5 Peak and lean period of Guar Marketing 15

6 Specifications for guar splits 17

7 Constituents of Guar Seed 17

8 Volatility in Guar Seed Prices 19

9 Volume of trade on NCDEX 20

10 High-Low difference in Guar seed prices in India 21

11 Impact on Spot Price of Guar due to variation in factors 21

12 Volume and Value of Guar Export in 2012-13 23

13 Major Exporting countries of Mucilages and Thickeners 24

14 Major importing countries of Mucilages and Thickeners 25

15 Export of Guar gum from India to USA and World 26

16 Export of Guar Derivatives from India. 26

17 Customs duty on Guar and its derivatives 28

18 List of items covered under Minor Forest Produce 29

19 Promising Varieties of Guar developed at ARS, Durgapura 31

20 Varieties released by CCS HAU 32

21 Quality Seed Production during 2009-10 at CCS HAU, Hisar 32

22 Genotypes with high gum content (>35%) 33

23 Research and Development in Guar 35

24 Marketing Infrastructure for Guar 36

25 Processing and Exports 37

26 Export and Industry promotion for Guar 38

27 Price and Market Intelligence 39

28 Guar Industry Value Chain 40

29 Guar industry associations/ representation 41

30 Sustainability and Diversity in Guar Industry 42

31 Risks in Guar Industry 42

44

List of Figures

Figure No.

Figure Name Page No

Fig-1 A Decade Growth 3

Fig-2 India's Share in World Guar Production 7

Fig-3 Share of Indian States in Guar Production in 2010-11 7

Fig-4 Area and Production of Guar in India 8

Fig-5 Area and production of Guar in Rajasthan 8

Fig-6 Area and Productio of Guar in Haryana 10

Fig-7 Shift in usage pattern of Industries 11

Fig-8 Flactuation in Spot Price of Guar at Jaipur 13

Fig-9 Value Chain of Guar India 16

Fig-10 Processes in extraction of Gum 18

Fig-11 Movement of Price determining factors at Sri Ganganagar Market 21

Fig-12 Major Players in the world guar market after India 23

45

Annexures

Annexure-I

1. Area, Production and Productivity of guar in Rajasthan, Haryana and India

YearRajasthan Haryana Gujarat India

Area Production Yield Area Production Yield Area Production Yield Area Production Yield

1990-91 2090 946 453 204 148 725 2403 1176 489

1991-92 1559 204 131 131 94 718 1765 346 196

1992-93 1882 583 310 155 93 600 2179 797 366

1993-94 1897 287 151 161 119 739 2101 490 233

1994-95 1959 708 361 156 17 750 2302 939 408

1995-96 1775 274 155 136 104 765 2213 900 407

1996-97 1819 740 407 127 104 819 2125 886 417

1997-98 1985 734 370 137 109 796 2301 963 418

1998-99 1612 320 198 127 82 646 1922 489 254

1999-00 2649 232 87 133 88 662 2934 375 128

2000-01 3056 481 157 148 102 689 273 61 223 3497 659 188

2001-02 2413 763 316 196 127 648 263 112 424 2903 1090 375

2002-03 557 28 50 205 91 444 213 65 306 974 203 208

2003-04 2278 1163 511 269 117 435 266 204 766 2854 1513 530

2004-05 1944 368 189 217 254 1171 214 157 733 2867 903 315

2005-06 2445 593 243 270 289 1070 214 157 575 2956 1059 358

2006-07 2808 658 234 295 334 1132 214 157 404 3352 1100 328

2007-08 2310 622 269 300 408 1200 196 130 662 3473 1789 515

2008-09 3316 1261 380 370 602 1627 1504 527 350 3863 1936 501

2009-10 2581 201 78 252 329 1305 1327 447 337 2996 595 198

2010-11 3001 1546 515 256 333 1300 1246 730 586 3382 1965 581

2011-12 3094 1847 547 215 290 1350 37 330 889 3444 2218 157

Note: Area in 000’ Ha, Production in 000’ MT, and Yield in Kg/Ha

2. Rainfall in Rajasthan and Haryana

RainfallYear Rajasthan Haryana Year Rajasthan Haryana

1991 351.5 483 2002 212 484

1992 609.5 534 2003 507 710

1993 540 661 2004 404.5 517

1994 685.5 749 2005 417.5 474

1995 644.5 1060 2006 536 372

1996 715.5 874 2007 403.5 454

1997 674.5 849 2008 477.5 631

1998 542.5 918 2009 320.5 333

1999 433.5 465 2010 610 598

2000 363 551 2011 635.65 433

2001 437 616

Note: Value in MM

46

3. Rainfall, Area and Production at Sri Ganganagar

Variables 2008 2009 2010 2011

Rainfall 265 168 343 378

Area 247294 152243 182192 162385

Production 196463 11163 163816 196487

Note: Rainfall in MM, Area in Hectares and Production in Tonnes

4. Rainfall, Area and Production at Bikaner

Variables 2008 2009 2010 2011

Rainfall 338 205 416 352

Area 884618 646533 876113 901354

Production 340294 47432 403368 526521

Note: Rainfall in MM, Area in Hectares and Production in Tonnes

5. Volume and Value of guar seed and gum traded at NCDEX

Year Guarseed Guargum Total Value (Rs. Lacs)

Share of Agri

Share of Agri in Total

2004Volume 47154280 2189220

9131374 12.6 10.9Value 8052645 1078729

2005Volume 188720650 7631460

35509858 6.1 5.4Value 32015433 3494425

2006Volume 140957040 3061625

29753354 44.8 36.5Value 28228674 1524680

2007Volume 65042430 1112070

12581448 43.7 37.8Value 12066908 514540

2008Volume 60371530 838690

11545295 39.4 35.1Value 11167117 378178

2009Volume 90297720 4270570

22025208 15.1 14.4Value 19912417 2112791

2010Volume 109862230 6690320

29062639 12.6 11.2Value 25580100 3482539

2011Volume 89985150 8589585

45397600 19.8 16.4Value 35203027 10194573

2012Volume 3301264 386999

4929595 20 19.4Value 3531120 1398475

2013Volume 1866755 333204

1658016 9.2 9.2Value 1089865 568151

Note: Volume in 000’ MT

47

6. Price of Guar seed at Sri Ganganagar, Jaipur and Hanumangarh Market

Year2007 2008 2009 2010 2011 2012 2013

GN JP HG GN JP HG GN JP HG GN JP HG GN JP HG GN JP HG GN JP HG

Jan 1685 1767 1693 1638 1606 1579 1467 1459 2429 2518 2458 2436 2264 2405 8968 7017 7269 11743 11482 11986

Feb 1666 1709 1656 1627 1681 1614 1459 1469 2309 2223 2401 2683 2474 2770 12950 10098 10166 10156

Mar 1678 1735 1697 1820 1855 1767 1464 1437 1478 2215 2116 2238 2473 2606 2274 21314 9685 9888 9885

Apr 1773 1776 1803 1734 1800 1754 1627 1694 1550 2183 2195 2207 2791 1041 1658 26973 9976 9584 9680

May 1586 1629 1623 1665 1733 1690 1600 1676 1481 2210 2213 2220 3059 2778 3035 28556 8551 8608

Jun 1631 1631 1624 1631 1698 1613 1635 1644 1643 2074 2086 2134 3099 2776 3167 18611 3891 7218 7449

Jul 1551 1595 1554 1727 1801 1755 1778 1666 1703 2251 2149 2257 3930 3823 13550 6365 4427 6503

Aug 1660 1602 1617 1559 1692 1654 2041 2003 1982 2039 2074 2046 4024 4089 13658 11000 9033 5390 4750 5814

Sep 1575 1589 1559 1500 1647 1431 1970 1949 1954 1821 1884 1846 3962 4200 7752 7571 8000 7485

Oct 1477 1542 1531 1503 1466 1480 2210 2186 2352 1932 1796 1952 4492 9675 4000 9799 5093 4361 5266

Nov 1512 1484 1476 1515 1457 1486 2451 2434 2379 2171 2109 2151 4549 4624 8975 8770 5004 4442 5046

Dec 1512 1503 1488 1424 1434 1430 2562 2564 2559 2292 2102 2313 5982 5733 6040 12462 9000 12660

Max 1773 1776 1803 1820 1855 1767 2562 2564 2559 2429 2518 2458 5982 5733 6040 28556 11000 12660 11743 11482 11986

Min 1477 1484 1476 1424 1434 1430 1459 1437 1459 1821 1796 1846 2436 1041 1658 7752 4000 3891 5004 4361 5046

Average 1609 1630 1610 1612 1656 1604 1855 1925 1834 2160 2122 2185 3623 2810 3462 15287 7754 8570 7881 7455 7989

Range 296 293 326 396 421 337 1103 1127 1100 608 722 612 3546 4693 4382 20804 7000 8769 6739 7121 6941

Note: GN- Sri Ganganagar, JP- Jaipur, HG- Hanumangarh

Monthly Average Arrival Price at respective mandis in Rs./qt. (Sourced from AGMARK)

7. Price Volatility in markets of Rajasthan and Haryana

Year

Rajasthan Haryana

Sri Ganganagar

Jaipur Hanumangarh Adampur Fatehabad Hissar

20071608.9 1630.2 1610.2 1647.7 1621.4 1592.9

5.5 6.0 5.9 6.0 6.7 6.9

20081612.0 1655.8 1604.4 1681.4 1639.3 1585.5

7.2 8.5 7.8 8.0 7.1 9.6

20091855.3 1925.2 1834.0 1929.9 1869.6 2002.9

20.9 19.3 22.0 21.1 21.5 20.2

20102160.4 2122.1 2185.3 2256.6 2140.7 2124.4

7.8 8.4 8.0 6.7 8.3 14.7

20113623.4 2810.3 3462.1 3830.6 3478.8 3382.8

29.4 50.6 36.1 28.1 29.5 25.4

201215287.1 7754.4 8570.4 16456.3 12880.5 4564.9

46.1 38.5 33.8 47.7 56.3 56.7

20137881.4 7455.5 7989.0 7910.3 7682.4 4534.5

29.2 39.5 28.3 24.5 23.5 56.6

Note: Upper cell- Average Price during the year, Lower cell- Co-efficient of Variation in percentage.

48

8. Daily Price (in Rs./qt.) at Jaipur market (Part1)

Apr-11

May-11

Jun-11

Jul-11

Aug-11

Sep-11

Oct-11

Nov-11

Dec-11

Jan-12

Feb-12

Mar-12

Apr-12

May-12

Jun-12

2100 2675 2840 3400 4300 4000 3800 4200 4800 6200 12000 18400 27000 29000

2625 2700 2810 2800 3500 4000 3800 4430 4800 7100 11700 19200 27160 28000

2550 2600 2800 3000 4200 3900 3800 4400 4800 6640 12000 21100 28000

2550 2725 1800 3100 3700 3850 4000 4500 4800 7900 11000 22140 26500

2600 2700 2925 3000 3300 3700 3800 4400 4800 7100 11500 22000 27500

2580 2710 3000 3325 3600 3910 3950 4600 4800 7000 13000 27500

2650 2790 2900 2500 3400 3950 3800 4300 4900 7300 12800

2725 2825 2860 3200 3300 3800 3725 4450 5100 7200 13500

2600 2810 2840 3200 3600 3850 3800 4240 5200 7200 14000

2575 2805 2900 3150 4000 3725 4150 5150 7300 14500

2300 2900 2900 3400 3450 3810 3900 5120 8050 16000

2650 2810 2800 3500 3900 3600 3800 5100 8300 15000

2450 2810 2850 3600 3800 3950 3800 5300 8300 16000

2350 2800 2950 3450 3200 3800 3900 5400 9400 15000

2650 2840 2811 3300 3900 4000 3825 5800 10500 16000

2680 2865 2825 3800 3200 4100 3910 6125 10450 15000

2650 2860 2800 3400 3800 6000 10000 14200

2650 3000 2750 3712 4100 6000 9200 15100

2650 2950 2825 3300 4100 5700 11000 16100

2725 2800 2800 3925 4100 5900 11300 17000

2580 2980 2750 4000 4100 6100 11500

2940 1875 4000 4300 6625 12000

2850 2875 4000 4100 6500 12375

2800 3025 4300 4350 6400 12000

2895 3015 4050 4400 6600 12000

2895 3010 4100 4500 6600 10700

2875 2900 4600 6300 12500

2650 2850 4600 6400 11500

2825 4600 6600

6825

6000

49

9. Daily Price (in Rs./qt.) at Jaipur market (Part2)

Aug-12 Oct-12 Nov-12 Dec-12 Jan-13 Feb-13 Mar-13 Apr-13 Jun-13 Jul-13 Aug-13 Sep-13 Oct-13

11000 4000 7400 11200 12000 11125 10100 9500 7725 5200 4200 8000 5100

7400 10250 12000 11100 9600 9700 6680 4500 5500 7050 4350

8853 12500 11500 11000 9500 10200 4300 6800 4650

8850 12425 12000 10000 9500 9800 4200 6500 4450

8850 13000 11200 9600 9700 9700 4600 6500 4650

8850 13500 11700 8700 10000 9625 8900 4300

8000 12500 12100 8800 10000 9225 5400 4400

9400 12000 11600 8950 9800 9080 4700

9000 13500 12000 10000 9375 9400 4750

13000 11800 9700 10000 8700 4900

12800 11500 9700 10000 8900 4750

11000 11400 9600 9600 9600 4710

15000 11500 9000 8500 4705

11000 9100 4650

11150 9800 4850

14400

11400

10 Seasonal Price Index at Jaipur and Sri Ganganagar Market

Jaipur Sri Ganganagar

Months Average Price Index Average Price Index

Oct-12 4000.0 51.1 9675.2 111.5

Nov-12 8511.4 108.6 8975.2 103.4

Dec-12 12513.5 159.7 12462.3 143.6

Jan-13 11779.4 150.4 11743.4 135.3

Feb-13 9856.3 125.8 10098.4 116.4

Mar-13 9671.7 123.5 9685.3 111.6

Apr-13 9379.2 119.7 9976.0 115.0

May-13 8551.2 98.5

Jun-13 7202.5 91.9 7218.1 83.2

Jul-13 4560.0 58.2 6364.6 73.3

Aug-13 4850.0 61.9 5390.2 62.1

Sep-13 7021.4 89.6 7570.6 87.2

Oct-13 4661.0 59.5 5093.3 58.7

Average 7833.9 8677.2

50

11. Quarterly Price Index at Jaipur and Sri Ganganagar Market

Quarterly Price Seasonality Index

PeriodJaipur Sri Ganganagar

Average Price Index Average Price Index

Apr11-Jun11 2741.8 28.0 2983.2 30.2

Jul11-Sep11 3604.4 36.8 3971.8 40.3

Oct11-Dec11 4742.9 48.4 5007.8 50.8

Jan12-Mar12 12193 124.5 14410.6 146.1

Apr12-Jun12 27583 281.7 24713.4 250.5

July12-Sep12 11000 112.4 11653.6 118.1

Oct12-Dec12 10577 108.0 10370.9 105.1

Jan13-Mar13 10536 107.6 10509.0 106.5

Apr13-Jun13 9089 92.8 8581.8 87.0

Jul13-Sep13 5832.1 59.6 6441.8 65.3

Period Average 9789.92 9864.4

51

Annexure-II

S. No.

Industry Uses Derivatives Functions

Industrial/ Technical

1. Oil well drilling Driling Fluids hydraulic fracturing

Borate cross-linked guar gum, hydroxy alkyl ether derivatives

Control of water loss, viscosity, suspension, turbulence, mobility, friction reduction

2. Textile Printing Cotton, Rayon silk, wool sizing, carpet printing

Carboxy-methyl guar, hydroxy propyl guar, modified guar gum

Reduces wrap breakage, reduces dusting film forming thickening for dye

3. Paper Wrapping paper, kraft, photographic paper, filter

Oxidized guar gum, cross-linked guar gum, amino ethyl gum, modified guar gum, guar gum formate,

Replaces hemi cellulose, increase strength, fold, pick, pulp hydration, retention of fines, decreases porosity

4. Mining Concentration of ore, filteration

Aminoethyl guar gum, sulphate of guar gum

Flocculating and settling agent, filter aid

5. Explosive Stick explosive, blasting slurries

Reticulated guar gum, cyanoethyl ether of guar gum

Water proofing, gelling agent

6. Water Treatment Industrial water, drinking water

Food grade guar gum Coagulant aid (food approved)

7. Tobacco Reconstitution of fragmental tobacco

Reaction product of carboxymethyl cellulose and guar gum

Binding agent, strengthening agent

8. Coal Mining Coal suspension, shock impregnation

Borate cross-linked guar gum

Friction reducing suspending agent

9. Fire fighting Water for fighting fires Guar gum with ethylene glycol and glycerol

Friction reducing, dispersion and direction control

10. Ceramic Enamels, electroceramics

Chlorinated guar gum Fixing, binding thickening agent

11. Photography Emulsions, gelatine solutions

Borate cross linked guar gum, hydrolysed guar gum

Gelling, hardening agent

12. Synthetic Resins Polymerization, suspension, collagen dispersion

Suspension of guar gum with CMC

Thickening, Binding agent

Food Applications

13. Frozen foods Ice creams, Soft serves, frozen cakes

Food grade guar gum with CMC

Water retention, ice crystel inhibitor, stabilizer

14. Bakery Bread, Cakes, Pastry, Icing

Non-metabolised guar gum Dough improvement, greater moisture retention, prolonged self life

15. Processed Cheese Cottage cheese, cream cheese

In combination with other water soluble gums

Increase the yield of curd solids, improves tenderness

16. Dairy Products Yoghurts, desserts, molasses

In combination with other water soluble gums

Inhibits when separate keeps texture after sterilization

52

S. No.

Industry Uses Derivatives Functions

g17. Dressing and Sauses

Salad cream, pickles, barbecue relish

In combination with other water soluble gums

Fast, cold dispersible thickening and texturising agent

18. Instant mixes Pudding sauses, desserts, beverages

In combination with other water soluble gums

Fast, cold dispersible thickening and texturising agent

19. Canned Foods Pet foods, corned meat, baby foods

In combination with other water soluble gums

Acid resistant thickening and suspending agent

20. Beverages Cocoa drink, fruit nector, sugarless beverages

In combination with other water soluble gums

Acid resistant thickening and suspending agent

21. Animal Feed Veterinary preparations, calf milk replacer

In combination with other water soluble gums

Suspending agent, granulating agent

Pharmaceuticals

22. Pharmaceuticals •Laxative,slimmingaids

•Gastrichyperacidity

•Diabetictreatment

•Cholesterol

•Vitaminformationpreparation

Food grade guar gum

Food grade guar gum

Food grade guar gum

Food grade guar gum

Food grade guar gum

Bulking agent, bulk forming appetite depressant

Synergistic activity with bismuth salt

Reduction of urinary glucose loss

Reducing aid

Stable water soluble suspension

Cosmetic

23. Cosmetics Ointment

Lotions

Tablets

Hair Shampoos

Hair Conditioners

Hydroxypropyl guar (HPG

Hydroxypropyl guar (HPG)

Food grade guar gum

Cationic guar

Hydroxypropyl guar (HPG)

Thickening agent gives unctuousness

Lubricating, suspending agent

Disintegrating and granulating agent

Detergent compatible thickener

Protective colloid film forming agent

53

Annexure-III

AGMARk Grade Standards

Grade designations and definitions of quality of Dehusked split (Refined) Guar Gum

Definition of quality (Special characteristics)

Grade Designation

Moisture % by

weight (Max.)

Ash % by weight (Max.)

Protein % by weight

(on dry basis)

Residue insoluble

in acid (Max.)

Gum % by

weight (Min.)

Black splits

% (Max.)

General Characteristics

Standard 10.0 1.0 Not more than 9%

5.0 80.0 1.0 The dehusked split guar gum shall :

General 11.0 2.0 Not more than 9%

7.0 75.0 2.0 (a) be obtained by milling guar seeds after removal of husk from guar pods of the plant botanically known as Cyamopsis tetragonoloba family Leguminosae.

(b) be free from dirt, dust added colouring matter visible mould growth insect infestation and ob- noxious smell.

(c) have characteristics shape, size and colour

* Includes organic extraneous matter such as stems, straw, chaff.

Table-13: Grade designations and definitions of quality of Guar Gum (Pulverised)

Definition of quality (Special characteristics)

Grade Designation

Moisture % by

weight (Max.)

Ash % by

weight (Max.)

Protein % by weight

(on dry basis)

Residue insoluble

in acid (Max.)

Gum % by

weight (Min.)

Viscosity at 250C in

centipoises (Min.)

pH Arsenic As2O3 ppm

(max)

Lead ppm

(Max.)

Grade-I 11.0 0.5 <= 9% 3.0 80.0 3000 5.5-7.5 1.0 5

Grade-II 12.0 1.0 <= 9% 5.0 70.0 2000 6.0-8.0 1.0 5

Grade-III 13.0 1.5 <= 9% 7.0 55.0 1000 6.0-8.0 1.0 5

* Includes organic extraneous matter such as stems, straw, chaff.

55

Annexure-IV

We thankfully acknowledge the inputs provided by following stakeholders, researchers, persons and association during study survey:

Name Address Contact No. DesignationDr. M. S. Jairath NIAM, Jaipur 91-9829210017 DirectorDr. Purushottam Sharma

Directorate of Soybean Research, Indore +91-8357045047 Senior Scientist

Mr. Akashdeep Gupta Basni Krishi Upaj Mandi, Jodhpur, Rajasthan

+91-9414126777 Broker

Mr. Prashant Bohra F 547, MIA, II Phase, Jodhpur, Rajasthan +91-9828130372 ProcessorMr. Shyam Kamal Sharma

G 657, MIA II Phase, Basni, Jodhpur, Rajasthan

+91-9829027259 Processor

Mr. Ashok Industrial area, phase-1, Jodhpur, Rajasthan

+91-9314709015 Processor

Mr. Indrakumar Khatri 189 New Grain Mandi, Bikaner, Rajasthan +91-9414139617 TraderMr. N. K. Jain G – 999/1000, Sitapura Ind. Area, Jaipur,

Rajasthan.+91-9829097078 Processor, Supreme

Gum JaipurMr. Ganesh Prajapat 402 – 4th floor, Gordhan Sky Tower,

Khatipura, Jaipur, Rajasthan+91-9509888669 Director-Farm

Development & Research, Guar Global LTD.

Mr. Kailash Chandra Harishankar

Renwal Anaj Mandi, Kisangarh, Rajasthan - Trader

Mr. Baldev Chaudhary Renwal Anaj Mandi, Kisangarh, Rajasthan +91-9950849455 ProcessorMr. Shankar Renwal Anaj Mandi, Kisangarh, Rajasthan - FarmerMr.Khemaram Renwal Anaj Mandi, Kisangarh, Rajasthan - FarmerMr. Rudaram Yadav Renwal Anaj Mandi, Kisangarh, Rajasthan - FarmerMr. Devendra Singh Baraith

Renwal, Kisangarh, Rajasthan +91-9829120090 Renwal Mandi Secretary

Mr. Surendra Nath Rajdhani Krishi Upaj Mandi, Kookerkheda, Jaipur, Rajasthan

- Trader

Mr. Kedar Rajdhani Krishi Upaj Mandi, Kookerkheda, Jaipur, Rajasthan

+91-9414143629 Broker

Mr. Sanjay Mahipal 20, New Dhan Mandi, Sri Ganganagar, Rajathan

+91-9414089553 Trader & Processor

Mr. B. D. Agrawal B-86,87 Udyog Vihar, Sri Ganganagar, Rajasthan

+91-9829225644 Vikas WSP

Mr. Kailash Mittal 85, New Mandi Yard, Sri Ganganagar, Rajasthan

+91-9414090347 Trader

Mr. Sanjay Gupta 129, New Dhaan Mandi, Sri Ganganagar, Rajasthan

+91-9414089864 Trader

Mr. Jaidev Gupta 131, New Mandi Yard, Sri Ganganagar, Rajathan

+91-9414088183 Trader

Mr. Gaurav Kaushik Axis Bank, Meera Chowk, Sri Ganganagar +91-9887154674 ResearcherMr. Purushottam 130, New Mandi Yard, Sri Ganganagar,

Rajathan+91-9414088065 Trader

56

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8. Encyclopaedia of Agricultural Marketing: Vol. XI: Export Marketing: Liberalization and GATT Perspective, edited by Jagdish Prasad. New Delhi, Mittal, 2005, xxvi, 338 p., tables, ISBN 81-7099-744-5.

9. Mohan Padmanabhan (2007). Indian guar gum, splits lose Chinese market to Pakistan, http://www.blonnet.com/2007/06/27/stories/2007062706271400.htm

10. Purushottam Sharma* and K.C. Gummagolmath: Reforming Guar Industry in India: Issues and Strategies. Agricultural Economics Research ReviewVol. 25(No.1) January-June 2012 pp 37-48, National Institute of Agricultural Marketing, Kota Road, Jaipur - 302 033, Rajasthan

11. NIAM (2005). Guar Trade from India: An Analysis, Commodity Trade Research Cell, NIAM, Jaipur.

12. APEDA website http://www.apeda.gov.in

13. NCDEX website http://www.ncdex.com

14. Krishi Rajasthan http://www.krishi.rajasthan.gov.in

CCS National Institute of Agricultural Marketing(Ministry of Agriculture, Govt. of India)Kota Road, Jaipur- 302033, RajasthanWebsite: www.ccsniam.gov.in

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