Guar Gum Values are Likely to Surge as the UK Uplifts the Ban on Shale Gas Production
- 09-Sep-2022 7:00 PM
- Journalist: Nicholas Seifield
Felixstowe (United Kingdom): Guar Gum's prices in the UK's domestic market increased by 1.3% in the first week of September due to the consistent demand from domestic merchants. Moreover, it is predicted that the upliftment of a ban on shale gas fracking by the UK government in a bid to boost fuel supply in the country may further support the increase in product prices.
Fracking, which uses Guar Gum, is a technique for obtaining shale gas that entails injecting pressured gas into the earth. Most of the Guar Gum used in the UK comes from Italy. A prohibition on Shale gas drilling was recently lifted by the new British prime minister, Liz Truss. This move was taken to increase domestic energy production, but the industry is still facing challenges.
In order to combat the skyrocketing energy prices that are harming both households and businesses, the prohibition was lifted. Additionally, in light of record-high international gas prices, Shale gas extraction is crucial for enhancing energy security and maximizing the UK's indigenous resources. The shale gas output has increased, which has further increased demand for Guar Gum and raised the prices of Guar Gum on the domestic market.
Earlier the production of shale gas was halted in 2019 amidst opposition from environmentalists and local concerns over earth tremors. However, the demand for Guar Gum was stable from end-use industries, including the food industry, where it is used to maintain the texture and homogeneity of ice creams and other frozen desserts. So this stable to moderate demand from other downstream industries kept the prices of Guar Gum stable in the domestic market.
The focus on fracking and licensing shows the UK government's focus on increasing supply rather than limiting demand by funding energy-saving measures like home insulation. These policies were taken by the government to tackle the energy crisis in the country. The production of Guar Gum is also likely to increase as well as the import which will further support the increase in the product prices.
As per the ChemAnalyst database, it is anticipated that the prices of Guar Gum will be further increased in the upcoming months as the government of the UK will start exporting shale gas from Britain by the spring after the fracking prohibition has been lifted. Furthermore, the plans to make Britain energy independent again by 2040 are initiated.
ChemAnalyst captures the Guar Gum prices trend in the global market, including numerous other Agriculture feedstock; click here to read more about Agriculture feedstock market dynamics for the past few months.