More background on guar gum

The Wall Street Journal has more info on guar gum in their article Obscure Indian Bean a Boon for Farmers. Mentioned earlier here.

Demand has increased which causes the price to rise:

Mostly grown in the heart of India’s desert lands, the price of the vegetable has jumped from about 40 rupees ($0.7) a kilogram at the time of the September-October harvest to around 300 rupees ($5.4) per kilogram today.

A runup from 40 rupees to 300 rupees is an increase by a factor of 7.5.

The article says Halliburton cites the price rise in guar gum as a factor in their second quarter financial results not being as strong as expected.  Seems like guar gum is a big factor if a 7 fold increase in price is visible in Halliburton’s quarterly margins.  They are looking for substitutes.  Don’t you love the pricing mechanism?

The article also describes the impact on farmers whose income has soared.

If you’ve read this far, you’ll want to check out the full article.

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