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Prolonged guar gum price hikes due to oilfield demand, expert

04-Feb-2011

Guar gum prices have continued to soar in early 2011 due to oilfield demand, dashing observers expectations of a downward trend on the back of a bumper crop from India.

Guar gum, a galactomannan from the seed kernel of the guar plant Cyamopsis tetragonoloba, is used as a thickener and stabiliser in a range of food products, including ice cream, baked goods, sauces and beverages. Some 80 per cent of the world’s supply hails from India, with Pakistan the next biggest supplier.

In early February guar gum prices have reached the dizzy heights of $2000 a tonne, according to hydrocolloid expert Dennis Seisun of IMR International. This follows steep increases in late 2010, which were attributed mainly to speculation and forward buying of guar seeds and splits on the Indian futures exchange NCDEX.

However the expectation from many in the industry that prices would fall in 2011 as speculators started to off-load their stocks – and due to the “excellent” Indian crop – has not come to pass.

According to Seisun – who was amongst those predicting stability – the only conclusion or hypothesis circulating at the moment is that high demand from oilfields has conspired with speculation effects to push prices up further.

Guar gum, and other hydrocolloids, are used in hydraulic fracturing, thereby increasing the yields.

Guar gum is not the only food hydrocolloid to be affected by oilfield demand; xanthan gum, too, is in high demand in the oilfields.

Seisun says that high energy prices mean the oilfield industry “can afford more in its quest for higher yields”.

Review and conference

IMR International publishes The Quarterly Review of Food Hydrocolloids, and will be providing a review of guar gum and competitive analysis in the forthcoming issues.

The Annual Food Hydrocolloid conference, taking place 10-12 April in San Diego, will also yield more insights. More details of the conference are available at www.hydrocolloid.com

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