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U.S. fracing boom helps poor Indian farmers

Famers in India’s Rajasthan region are enjoying an unexpected economic boost, due to the surging demand for guar gum used for fracing shale.  A derivative of the guar bean and usually considered a marginal food crop, guar gum powder is also used as a food thickener in some ice creams, pet foods and even toothpaste. It is the powder’s use as a viscosifier in certain hydraulic fluids used in fracing that has led to a big jump in demand and the current guar gum shortage.

The price for the guar beans has climbed accordingly, from around $4 a kilo in the U.S. to as much as $30 within the past year and a half, benefiting some of India’s poorest farmers and bringing much-needed revenue into their villages.

India is the number one producer and exporter of guar gum powder in the world, producing over a million metric tons per year. Of that, the oil industry in America will use as much as 300,000 metric tons this year, over half India’s total guar export. Just in March, the U.S. imported 33,800 metric tons of guar gum from India, compared to an average 22,000 tons/month a month in 2011. A looming shortage of the substance has caused oil companies to scramble in their search for substitutes.

According to Indian agricultural officials, farmers are planting guar beans in ever-growing numbers. Guar is grown in marginal, dry soils, but depends on annual monsoon rains to kick off its normal life cycle. For this reason, guar is difficult to grow in other countries, with only Pakistan able to produce the bean in reasonable quantities.

06/11/2012

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