Guar gum and guar seed futures declined as weak oil sector demand and higher crop output created oversupply, hurting farmer incomes.
Guar gum and guar seed futures experienced a decline on July 15, 2026, primarily due to reduced demand from the oil exploration sector and an increase in supply. This market downturn is creating significant economic challenges for farmers in major producing regions.
On the National Commodity and Derivatives Exchange (NCDEX), the October contract for guar gum fell by 1.76%, settling at 12,080 rupees per 100 kilograms. Similarly, the October contract for guar seed saw a 0.53% decrease, reaching 5,997 rupees per 100 kilograms. This downward trend reflects a weak spot market and an overall surplus of
The primary reason for the fall in guar gum futures is a significant lack of demand from oil exploration industries. Guar gum, derived from guar seed, is crucial for hydraulic fracturing (fracking) in the oil and gas sector. A global slowdown in oil and gas exploration activities has directly reduced the need for guar gum.
Adding to the demand-side issues, supply has increased. Favorable monsoon rains this year have led to expectations of higher output. Additionally, farmers in key growing regions like Rajasthan, Haryana, and Gujarat expanded their guar seed sowing areas by 5-10%. Many farmers shifted to guar cultivation last year due to better prices compared to other crops, contributing to the current oversupply.
The falling prices are causing considerable distress for farmers. The current market price for guar seed has dropped below the Minimum Support Price (MSP) of 6,000 rupees per 100 kilograms, impacting their profitability. This situation poses a challenge for agricultural livelihoods in the regions where guar is a major cash crop.
For the industry, traders anticipate that prices will remain subdued in the near term. The overall market outlook for guar gum and guar seed is heavily dependent on global crude oil prices and the future pace of oil and gas exploration activities. A sustained recovery in these sectors would be necessary to stimulate demand and stabilize prices.
Impact on Chemical Commodity Prices Tracked by ChemAnalyst
The decline in guar gum and guar seed prices reflects weaker demand from the oil and gas sector alongside rising domestic production. Industries using guar gum, including oilfield services, food processing, pharmaceuticals, textiles, and cosmetics, may benefit from lower raw material costs. However, guar farmers face reduced profitability as prices slip below the Minimum Support Price (MSP). Unless global crude oil prices and drilling activities recover, guar markets are expected to remain under pressure with ample supply keeping prices subdued.
Weak guar gum demand from the oil exploration sector and higher guar seed production are expected to keep guar-based commodity prices under pressure. Guar Gum: Bearish (Short Term) – Oversupply and subdued oilfield demand will likely sustain lower prices. Guar Seed: Bearish – Increased sowing and favorable monsoon conditions are expected to maintain ample availability. Hydraulic Fracturing Chemicals: Slightly Bearish – Lower guar gum prices could reduce costs for fracking fluid formulations. Food & Pharmaceutical Thickening Agents: Stable to Slightly Bearish – Cheaper guar gum may marginally reduce formulation costs. Overall, chemical markets are expected to witness limited downstream cost relief rather than broad price volatility.
