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In September 2024, guargum prices surged by 11.50%, reaching ?11,800 per quintal, primarily driven by increased demand from the U.S. oil industry. As hydraulic fracturing (fracking) relies heavily on guargum, the 6.5% rise in U.S. oil production this year has boosted demand for the product. The shale oil boom, particularly in regions like the Permian Basin, and favorable market conditions have also contributed to the price increase. Global oil prices have stabilized, and infrastructure investments in the U.S. energy sector are supporting higher demand for guargum. With rising U.S. oil rig counts and continued growth in global energy demand, guargum prices are expected to remain strong in the near future.

Key Highlights

* Guargum prices increased by 11.50% in September, reaching Rs.11,800 per quintal.

* The rise is linked to the growing demand from the U.S. oil industry, where fracking activities have surged.

* U.S. oil production increased by 6.5% this year, driving demand for guargum in hydraulic fracturing.

* Favorable global oil prices and increasing rig counts have supported the rise in guargum demand.

* Market outlook remains positive with sustained global oil demand and production growth.

Guargum prices witnessed a significant 11.50% gain in September 2024, reaching Rs.11,800 per quintal. This sharp increase is primarily driven by rising demand from the U.S. oil industry, where guargum is a key component in hydraulic fracturing (fracking). The U.S. oil production has surged by 6.5% this year, setting a new record, which has directly fueled the demand for guargum used in the fracking process.

The shale oil boom, particularly in regions like the Permian Basin, and the favorable market conditions have led to an uptick in oil drilling activities, pushing up the need for guargum. With global oil prices stabilizing and infrastructure investments in the U.S. energy sector, demand for guargum has shown strong momentum.

The infrastructure expansion in the U.S. has also facilitated the easy transportation and use of guargum, further boosting its demand.

Finally, with the U.S. oil rig count expected to rise and oil production continuing its upward trajectory, guargum prices are anticipated to remain supported in the near term. The global energy demand, alongside technological advancements in fracking, will likely sustain this upward price trend for guargum and guar seed.

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