Guar: Common man's food turns into green gold
NEW DELHI: It used to be a
dry and arid land legume grown by poor farmers on marginal lands in
Rajasthan, Haryana, Gujarat and Madhya Pradesh. Till a few years back,
it sold for as low as Rs 1,000 a quintal. Eaten either at home by
farmers (some may remember it as guar
ki phalli) or sold off for export to be used as a binding and
thickening agent in edible products like ice creams, it sells now for
anything between Rs 10,000- Rs 30,000 a quintal. The reason: it has
become an essential lubricant for the multibillion shale oil and gas
drilling where its used for the 'fracking' process.
The result is a frenzy that is connecting traders from Houston to Jodhpur and turning the obscure plant grown mostly on wastelands into a much sought after commodity. The rising prices and short supply is making farmers and business groups push for more acreage.
India produces 80% of the global guar crop with Pakistan and the US following a distant second and third though all are trying to increase acreage of the bean. Because it is a rainfed crop with relatively little organized market, upscaling production has not been a smooth process.
The demand for gum extracted from the guar seed or cluster bean as it is known in English has shot up so high on the commodities market that the regulator, Forward Markets Commission, has had to step in once to halt futures trade in illegal transactions. Nothing has stopped the bull run though.
The boom, however, could be temporary as the shale oil and gas industry in the US, which is already worth $30 billion, is furiously looking for alternatives as prices of guar skyrocket. In the meanwhile, there is a gold rush to make the most of the demand. Industry insiders suggest that for every rupee a trader invests at the local level - say at centres like Jodhpur or better still in the villages where marginal farmers are growing it - he could earn more than Rs 100.
There are established exporters who have been supplying guar for the food industry for years and then there are the guar cowboys running to the arid zone even in soaring temperatures to get a share of the pie.
The controversial shale oil drilling in the US (the green brigade is set against it) is seen as the future of the fossil fuel driven world and the marginal small farmers in distant Jhunjhunu and Jodhpur in Rajasthan have become a part of that lucrative future.
tio
The result is a frenzy that is connecting traders from Houston to Jodhpur and turning the obscure plant grown mostly on wastelands into a much sought after commodity. The rising prices and short supply is making farmers and business groups push for more acreage.
India produces 80% of the global guar crop with Pakistan and the US following a distant second and third though all are trying to increase acreage of the bean. Because it is a rainfed crop with relatively little organized market, upscaling production has not been a smooth process.
The demand for gum extracted from the guar seed or cluster bean as it is known in English has shot up so high on the commodities market that the regulator, Forward Markets Commission, has had to step in once to halt futures trade in illegal transactions. Nothing has stopped the bull run though.
The boom, however, could be temporary as the shale oil and gas industry in the US, which is already worth $30 billion, is furiously looking for alternatives as prices of guar skyrocket. In the meanwhile, there is a gold rush to make the most of the demand. Industry insiders suggest that for every rupee a trader invests at the local level - say at centres like Jodhpur or better still in the villages where marginal farmers are growing it - he could earn more than Rs 100.
There are established exporters who have been supplying guar for the food industry for years and then there are the guar cowboys running to the arid zone even in soaring temperatures to get a share of the pie.
The controversial shale oil drilling in the US (the green brigade is set against it) is seen as the future of the fossil fuel driven world and the marginal small farmers in distant Jhunjhunu and Jodhpur in Rajasthan have become a part of that lucrative future.
tio
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