MUMBAI, 05 Dec (Commoditiescontrol): The castor market today experienced a relatively stable prices in spot trade while notable decline witnessed in futures trading, driven by bearish sentiment among traders. Market participants are closely watching the developments, with expectations that the bearish trends in the futures market could influence spot prices in the coming days. However, limited arrivals and steady demand for crushing are likely to provide some cushion against a significant drop in spot market prices.
In the spot market, castor prices held firm at ₹1,255–₹1,275 per 20 kilograms, reflecting stability amid the broader market volatility. The total arrivals today stood at approximately 23,000 bags (1 bag = 35 kg). Gujarat contributed 20,000 bags, Rajasthan added 2,000 bags, and direct purchases by mills accounted for 1,000 bags. However, this level of daily arrivals remains insufficient compared to the crushing demand, which stands at 35,000–40,000 bags per day. This disparity is leading to a gradual depletion of stock levels at mills, reinforcing the stability of spot prices despite the weakness in futures trading.
The futures market, on the other hand, witnessed sharp declines across major contracts. At the National Commodity and Derivatives Exchange (NCDEX), castor contracts for December, January, and February saw significant price drops by the end of the trading session. The December contract declined by ₹83 to settle at ₹6,396 per quintal, while the January contract fell by ₹81 to ₹6,470 per quintal. The February contract recorded the steepest drop, losing ₹165 to trade at ₹6,435 per quintal. These declines highlight the prevailing bearish mood in the futures segment, with speculators driving down prices amid concerns over short-term demand fluctuations.
This bearish sentiment also affected prices at the mill level, where traders adjusted their offers to reflect the trends in the futures market. Key price movements included a drop in prices at Jagnath Shippers, where the morning price of ₹1,305 per 20 kilograms fell to ₹1,290 by the close of the day. Similarly, prices at N.K. Mills decreased from ₹1,320 to ₹1,310 per 20 kilograms, while Kandla Port saw a reduction from ₹1,295 to ₹1,285 per 20 kilograms. In the castor oil market, Kandla delivery prices on a "Ready-Ready" basis dropped from ₹1,317 to ₹1,305 per 10 kilograms by the end of the day, reflecting the overall bearish trend in the sector.
Despite the weakness in futures, traders and market analysts remain optimistic about the resilience of the spot market. The steady crushing activity and limited daily arrivals are creating a scenario where stock levels at mills are being steadily drawn down, reducing the likelihood of a significant downturn in spot prices. However, if bearish sentiments in the futures market persist, there could be some impact on buyer sentiment in the spot market over the coming days.
The castor market is currently navigating a complex interplay between bearish futures and stable spot prices. While the derivatives market has shown considerable weakness, the fundamentals of the spot market remain robust, supported by steady demand and limited supply. Traders and stakeholders will be closely monitoring the situation to assess the potential impact of the futures market on spot prices. For now, the market's ability to balance these opposing trends will determine its trajectory in the short term.
(By Commoditiescontrol Bureau; +91 98201 30172)
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