Guar Gum Powder
At the end of 2016 Guar prices were at a low level. For no obvious reasons, however they started to rise in February and increased by about 35% by May. Most likely prices were driven by the high amount of orders from the oil sector and a scarcity of the raw material.
It was assumed that prices would continue to rise further on, but they began to decrease and finally fell by about 12%. Despite the decline prices were still around 15% higher than the level at end of 2016. Prices varied with smaller up´s and down´s but have been falling noticeably again recently. Further significant price reductions are unlikely as at the current level the farmers’ incentive to grow guar would be low and this would have a negative impact on the next crop. The weather forecasts for the upcoming monsoon rain (important for the harvest in October / November) are rather optimistic.
Contact us for any short-term need, we deliver promptly from stock. Long term contracts are favourable.
We have reported several times that the prices for Xanthan gum have fallen dramatically because of the competition amongst Chinese producers. Meanwhile it is obvious that there are no winners in this prize fight.
Fufeng, who is still the market leader has gradually increased prices over the last few weeks, and the others followed immediately, because the long-lasting loss situation was not sustainable for any producer. These multiple price increases are only a first step in Fufeng’s view. Supposedly Xanthan gum is still sold under manufacturing costs.
The demand for Xanthan gum remains at a high level. The gas and oil industry is a strong consumer, as is the case with Guar gum, and also the demand in the food sector is rising.
We recommend taking into account the current conditions to cover the needs for the coming months.
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