Guar glittered

The humble guar plant has literally turned into a cash crop in Rajasthan. And what was till recently mere cattle feed has made scores of farmers rich, almost overnight, thanks to its meteoric price rise.
Vidon Dhadhariya, a farmer in Bikaner, says farming used to be a “dead-end job” in the semi-arid regions there. Making ends meet was difficult till he decided to go for guar. He’s never regretted it since. He sold 100 quintals of guar seed at Rs 30,000 per quintal in February. And to think that just a year-and-half back the seeds fetched a paltry Rs 2,300 a quintal. More importantly, the price of guar gum, a derivative of the seeds, had zoomed from Rs 6,364 per quintal (in January last year) to Rs 1 lakh (in March this year) before future trading of the commodity was banned, bringing down the price somewhat. But it’s been a windfall nonetheless.
India, in fact, is the single-largest producer and exporter of guar gum and accounts for more than 70% of the global output. Rajasthan produces close to 80% of the country’s guar. The semi-arid regions of Gujarat, Haryana, Punjab, Uttar Pradesh and Madhya Pradesh make up the rest.
It all started in late 2011 when the prices of guar began climbing as US-based companies, including Halliburton, the world’s largest provider of hydraulic-fracturing services, built a bigger inventory apprehending a shortage in guar output.
The reason for this high demand is because oil drilling companies use guar gum to make hydraulic drilling fluids. These are pumped underground at high pressure during fracking, the process used to extract shale gas.
Guar also has other applications. Guar gum powder is used in the textile industry to keep yarn smooth and strong. It increases the strength of paper and is used in the food industry to enhance taste and texture. Large parts of rural Rajasthan have tasted the first signs of prosperity, thanks to this plant.
But how long the party will last is anyone’s guess. Already gas prices are falling and there’s a huge guar gum inventory. Prices of guar gum have dived 70% — from the record high levels of Rs 1 lakh per quintal in March to about Rs 29,000 now. Halliburton said in July that its North American operating profit margins declined by 4.8% due to the sharp rise in guar prices. The farmers of Rajasthan, however, continue to ride high on the crop.