Mumbai: Castor seed futures on NCDEX may remain firm in the short term, due to good export demand besides arrivals slowing down in the major mandis of Gujarat and Rajasthan.
Though the prices in the international market moved up substantially, export volumes declined marginally in the past three years, due to rupee appreciation. In fiscal 2008, India exported 1.7-lakh tonnes of castor oil against 1.9-lakh tonnes in the last fiscal.
Export price in February-March was quoted at about $1,400 per tonne (free on board). “Despite export volumes being lesser than the last year, better price realisation has helped to moderate the impact of rupee appreciation against dollar,” said Chowda Reddy, Research Analyst, Karvy Commodities.
China consumes about one-third of global castor oil production, while domestic demand is very low. Other major consumers’ include Europe and Brazil.
Production
For crop season, which ends in May 2008, the production is estimated at about 9.09-lakh tonnes, up by 16 per cent over last year. Yields and area under castor cultivation has been increasing, especially in Gujarat. Area under castor seed has increased by 26 per cent to 3.54-lakh hectares in 2007-08.
Gujarat is estimated to produce 6.5-lakh tonnes in 2007-08 with a yield of 1,838 kg per hectare. It has about 20 castor seed processing mills and major hub for castor seed industry.
Gujarat and Rajasthan together contribute about 87 per cent to total production. Gujarat has the largest share in India with 71 per cent followed by Rajasthan 16 per cent and Andhra Pradesh 9 per cent.
Prices
Castor seed prices have gained 46 per cent in the last one year and are currently quoted at around Rs 500-520 per quintal in Gujarat and Rajasthan. Negligible carry forward stock due to lower output last year has pushed the prices to higher levels.
In the short term, futures prices on NCDEX may touch Rs 580-600 per quintal due to low arrivals and higher export demand. However, prices could come down sharply from Rs 600 levels in long term, as sowing begins from June-July.
Though the prices in the international market moved up substantially, export volumes declined marginally in the past three years, due to rupee appreciation. In fiscal 2008, India exported 1.7-lakh tonnes of castor oil against 1.9-lakh tonnes in the last fiscal.
Export price in February-March was quoted at about $1,400 per tonne (free on board). “Despite export volumes being lesser than the last year, better price realisation has helped to moderate the impact of rupee appreciation against dollar,” said Chowda Reddy, Research Analyst, Karvy Commodities.
China consumes about one-third of global castor oil production, while domestic demand is very low. Other major consumers’ include Europe and Brazil.
Production
For crop season, which ends in May 2008, the production is estimated at about 9.09-lakh tonnes, up by 16 per cent over last year. Yields and area under castor cultivation has been increasing, especially in Gujarat. Area under castor seed has increased by 26 per cent to 3.54-lakh hectares in 2007-08.
Gujarat is estimated to produce 6.5-lakh tonnes in 2007-08 with a yield of 1,838 kg per hectare. It has about 20 castor seed processing mills and major hub for castor seed industry.
Gujarat and Rajasthan together contribute about 87 per cent to total production. Gujarat has the largest share in India with 71 per cent followed by Rajasthan 16 per cent and Andhra Pradesh 9 per cent.
Prices
Castor seed prices have gained 46 per cent in the last one year and are currently quoted at around Rs 500-520 per quintal in Gujarat and Rajasthan. Negligible carry forward stock due to lower output last year has pushed the prices to higher levels.
In the short term, futures prices on NCDEX may touch Rs 580-600 per quintal due to low arrivals and higher export demand. However, prices could come down sharply from Rs 600 levels in long term, as sowing begins from June-July.
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