JAIPUR (Commoditiescontrol) - Castor seed prices are expected to be slid below Rs 3,000 per quintal from the current level at Rs 3600-3700 per quintal due to higher output. The commodity is reeling under pressure from the weak sentiments, which are long due. Domestic production is pegged at 12.76 lakh tonnes.
Without disclosing his name an exporter based at Palanpur told that demand is very weak compared to supply so castor oil prices would fall to $1,200 per tonnes which is three year’s lowest level. However, current prices are attractive for importers. Export deals are being finalized at $1,200 per tonnes but export is not viable at such price because castor seed firmed up. This is the reason why castor seed is expected to fall.
Around 4 lakh tonnes castor oil was exported during first 11 months of current financial year 2014-15. The export was 4.35 lakh tonnes during same period of last year. Castor oil export was only 35,773 tonnes during March. Castor cake export reduced to 458,406 tonnes during 2014-15 compared to 533,668 tonnes of last year.
The exporter opined that the prices are unlikely to fall further in short term but market sentiments will be weak if there is good rain in mid of June. Castor seed is sown in August but the prices may fall if rain comes on time. Castor seed arrival increased to 1.35 lakh bags (75 kg in each bag) across the country on daily basis. While, export demand for castor oil and castor cake is very poor. Castor cake is offer at $122-125 per tonne (FOB) on Kandla port while C&F price is hovering at $135 per tonne. The exporter told that castor cake and Doc is also used as fuel in fertilizer and boilers. But export demand from this market is weak because boilers are using coal as cheaper fuel.
Mr. Rounak Mehta from Mehsana based Manohar Lal & Company told that castor seed production is estimated at 12.76 lakh tonnes which is higher at 11.30 lakh tonnes last year. But the variation in crop production and arrival is indicating that actual output will be lower. According to Mr. Mehta, the production will be less than 10 lakh tonnes. He says that carry over stock was 7 lakh tonnes. There was stock of 396,425 tonnes as on 1 May, 2015 in NCDEX affiliated godown. Although, the farmers are not ready to sell their crop at lower price but export demand is also weak. Castor demand picks up between April and June. Presently, stockists, hedgers and plant owners are purchasing seed in little quantity as current lower prices.
Mr. Mehta told that the export was 13 lakh tons last year which was 20 per cent lower than previous year. If the export declines further 10 per cent, even then the output of 10 lakh tons and carry over stock will not reduce. He says that there is little possibility of price fall from present levels but there should not be surprise if castor seed is sold below Rs 3,000 per quintal. Good rain after 15 June will discourage the demand.
Solvent Extractors Association of India (SEA) told that castor seed was sown in 10.27 lakh hectares in 2014-15 while the central government had estimated acreage of 10.99 lakh ha. According to SEA, castor production is estimated at 12.76 lakh tons while the production would be 13.68 lakh tons on the basis of acreage estimation of the government.
(By Commoditiescontrol Bureau; +91-22-61391533)