Published on 2025-10-30
The situation is so volatile, we have nearly given up trying to keep up. Nearly though. Several buyers have taken pre-emptive action and imported 6, 12 or even 18 months' worth of hydrocolloid consumption. Just in time - Just forget it. Higher inventory costs stored for longer periods will undoubtedly lead to higher prices.
Buyers are shifting purchasing strategy to minimize tariff disruption by purchasing from the production facility of a supplier which is in a lower tariff country, if the supplier has plants in more than one country, for example gelatin from Argentina or Brazil. Internal company transfers makes it difficult to trace manufacturing origin. Blending activities make if even more difficult if not impossible. For example, if a blend is made in country A with ingredients coming from countries B, C and D, what is it's country of origin? Generally, the country in which the blend is produced, has been considered the country of origin. Similarly with processing of raw material. Is the origin of the raw material the country of origin, or the country in which the raw material is processed and value added eg gum acacia from Sudan that is processed in Europe or the US.
Guar gum from India is facing a 50% tariff in the US (for now). It may be advantageous to import the lower value guar seeds and then add value by extracting the gum in the US. There would be extra shipping costs because guar seeds contain only 26-28% gum. Alternatively, the situation offers a possible advantage to guar gum suppliers from Pakistan which is facing a much lower tariff than India. Note that Mexico is now a producer of guar crops and guar gum which is at a 0% tariff for now.
In these uncertain times, the only constant seems to be uncertainty itself.
There is, unfortunately, no shortage of 'scares' in the food industry. Most of them are overblown technicalities with little relevance to actual risk to consumers. The latest such incidence occurred in the EU recently when a detected level of chlorate in a batch of xanthan gum triggered a "Rapid Alert System for Food and Feed - RASFF" communication. There is no set limit by EFSA for permitted chlorate level in hydrocolloids. Instead, the legislation states that "chlorate levels should be kept "as low as reasonably achievable- ALARA". Chlorate thresholds as disparate as 0.01ppm to 100+ ppm are referenced in ongoing discussions. Chlorate levels in drinking water and in swimming pools are claimed to be higher than that found in hydrocolloids. A rough calculation by IMR found that the "Tolerable Daily Intake - DTI" of cholrate set at 3 micrograms/kg body weight/day, is highly unlikely to be achieved with xanthan consumption at <0.1% in beverages or 0.25% in dressings. Not even in the case of a child of only 10kg weight.
These periodic food scares are often triggered by a failure to distinguish between hazard and risk. Virtually any ingredient can be a hazard but it becomes a risk only if exposure is taken into consideration ie "The dose makes the poison". An excellent article covering the difference between hazard and risk is presented by the Center for Research in Ingredient Safety (CRIS) of Michigan State University, HERE.
Process chemicals leading to the production of chlorates are used as pH regulators to increase yield and/or as bleaching agents to make hydrocolloids more 'white/clean looking'. They may also simply be used to clean and disinfect shipping containers which could result in chlorate contamination.
The bottom line is that hydrocolloid producers now have one more regulatory concern to deal with. This in turn has allowed some xanthan producers with lower chlorate levels to differentiate from others with higher levels. Even if the risk posed by either producer is negligible
Jodhpur, Rajasthan is the Mecca for guar gum. IMR conducted personal visits and interviews inJodhpur during multiple visits in 2010-2012. These were the crisis years for guar when hydraulic fracking and horizontal drilling created havoc in the guar world. Prices skyrocketed to unimaginable levels. Then the crash came and now some 13-15 years later the guar situation has become relatively stable again. US trade tariffs may cause bumps in the guar market but unlikely to come near the chaos of 2010-2012 caused by horizontal drilling.
A visit to the Jodhpur Mundi (market) in 2012 by Dennis Seisun allowed the filming of a quick guar auction of 10 tonnes of guar seed. A clip of the auction is HERE. Manual bagging after the sale is HERE.
The price of seeds sold in the 2012 auction was INR 81.5/kg. Prices, however, went as high as INR 120-150/kg during the crisis days. Currently guar seeds are listed on the NCDEX, at around INR 45-50/kg. IMR has published in-depth reports on the guar industry with table of contents as follows:
Guar Report – Jodhpur Visits Conversion Factors Exchange Rates and Abbreviations Crop Size & Carryover – 2012 vs 2011 Market Size – Supply & Demand Market Value – Potential & Actual Price & Profitability Major Guar Processors Guar By-Products Seed Variation - Irrigated vs. Non-Irrigated Crops Organic Guar EU Testing Requirements for Guar Gum Guar Grades - Specifications Guar Replacement in Food and Oilfield Import Data USA Regulatory Role of NCDEX Distribution Forecast
Current food grade guar gum is priced around $1.00/kg and Euro 1.75/kg. These prices are for large volumes and may vary significantly for smaller volumes and/or for special grades such as Organic, high viscosity etc. The high US tariffs on imports from India have yet to have any impact on Indian guar prices.
Call IMR for a customized up to date market report on guar gum.
