The international market for the guaran has been growing rapidly primarily due to increasing demand from the oil, food and pharmaceutical industries. The multi-functionality of the guar powder is the main driving factor responsible for the heavy demand. The guaran is a natural additive with different applications in industry, due to its unique properties such as thickening properties, gelling agent, stabilizer, and fat replacer. The inequality in supply and demand is a major hindrance to its market expansion.
Global Guar Gum 2017 Market Share
The oil and gas industries are the biggest guar gum consumers and comprise of approximately 60% of Indian exports of the guar. The rest is consumed in food and allied industry such as in the manufacture of toothpaste. There has been a steady increase in the guar gum exports from India to the rest of the world at a rate of 20% per annum.
Guaran (Guar Gum) Market Trend
Huge global supply saw the guar lose its value over the last three years. The oil prices crash has also contributed to the decline in the demand of the guar. Emergence of oil energy substitutes meant reduction in the demand for the products. The export volumes of the guar have however remained relatively stable despite decline in the price levels.
Market Segmentation for the Guar Gum
The main importers of guar are the United States, Germany and China. The petroleum industry uses 65% of global production, 30 % goes to the food sector while the remainder is used in the pharmaceutical industry.
Guar Gum Production and Market Forecast
The rapid price increases, due to demand spike in the United States, led to India, the main producer to expand their production, which rose to up to 2.45 million metric tons in the year 2015-2016. New production site were set up and processing factories established in the state of Rajasthan. The higher prices forced importers like china and Australia to seek local production and to explore cheaper substitutes, which led to a decline in the prices.
Despite this fall in the prices, the demand for the guar is still relatively stable. This has been supported by the continued expansion in shale oil and gas production. The china government has set a target of producing over 300 billion cubic meters of gas up to the year 2020. The European food sector accounts for 10 – 15 % of the exports from India. This trend is expected to continue.
The increasing awareness and trends towards consumption of organic foods is also likely to contribute to increased demand for the guar gum powder. Increased per capita income in the developing countries is also likely to boost the demand for the product in the food industry.
These factors added with the fact that guar powder remains the best in the category of gelling, stabilizing and thickening agent means that it will remain an attractive investment, which will have a good rate of return in the long-run.