Guar gum could be relisted on India’s futures market if a positive committee decision is reached next week, according to the country’s commodity markets regulator.
India’s Forward Markets Commission (FMC) said a decision on relisting guar futures will be taken at the first meeting of the Advisory Committee on October 16, according to a report in the Economic Times India.
The 40-strong Advisory Committee is comprised of members of the Warehousing Development and Regulatory Authority (WDRA), Securities and Exchange Board of India (SEBI), promoters of commodity exchange, farmers, and co-operatives.
The FMC banned futures trading in guar gum and guar seed back in March in a bid to curb price volatility and speculation.
This latest move to upturn the ban has been prompted by calls from India’s leading futures exchange NCDEX to re-list guar gum and guar seed futures.
Relisting won’t impact industry
However, hydrocolloid expert Dennis Seisun, consultant at IMR International, said the move would do little to change market conditions.
“There was little immediate change when it was delisted. Uncertainty continued, price volatility remained – the market didn’t change. So this suggests to me that relisting won’t spark much change either,” Seisun told BakeryandSnacks.com.
“The financial guar wizards will have another playground to play in again but it is unlikely to impact price and supply,” he said.
Guar gum rollercoaster
Some 80-85% of the world’s guar gum supply hails from India, with Pakistan the next biggest supplier.
Prices and demand of the ingredient started to surge in 2010 when the oilfield industry started to use the gum in its fracking process, causing problems for the food industry.
Prices have now dropped; with the latest price estimate from IMR International at around $7-8 per kg, nearly half of what it was in March.
Once the new crop comes onto market in November new price fluctuations may occur, Seisun said, but it is impossible to know if they will surge or drop.
“Food firms are a little less motivated and less desperate to replace guar gum but are still very wary of what could happen,” he said.