The Hindu Business Line : Monsoon worry, export demand prop up castorseed prices

CASTORSEED spot and futures prices at the major trading centres of Gujarat — Ahmedabad and Rajkot — have increased by over 11 per cent in the last three weeks, on good export demand and continued concerns over the southwest monsoon. Spot prices have touched the current year's high level of Rs 1,925 per 100 kg on reduced inflows of seeds to Gujarat's marketing yards.

In the Ahmedabad Commodity Exchange, castorseed October contract prices moved up by Rs 155 per 100 kg or 10.28 per cent to end at Rs 1,925 per 100 kg on July 22 compared to Rs 1,770 per 100 kg on July 1. Castorseed spot prices also rose by Rs 250 or 15 per cent at Rs 1,925 per 100 kg on July 22 compared to Rs 1,675 per 100 kg on July 1.

"Spot and futures prices have been moving up in last three weeks mainly because of weather concerns and good export demand. There are some enquires for exports from Russia and France. Export shipment for July is expected to be around 25,000 tonnes," according to a Ahmedabad-based trader. Castor oil exports during the April-June 2004 period recorded at 57,417 tonnes compared to 50,781 tonnes over the corresponding period last year, up by 13.06 per cent.

There are (unconfirmed) reports that a Gujarat-based shipper has struck a deal with a Russian party at $900 per tonne. Current spot price of castor oil at Rotterdam was quoted at $1075 per tonne for July/August.

In the Rajkot Oilseeds Exchange, castorseed October contracts firmed up by Rs 175 per 100 kg or 10 per cent to finish at Rs 1975 per 100 kg on July 22 compared to Rs 1,800 per 100 kg quoted on June 22.

In the Bombay Commodity Exchange, castorseed September contracts moved up sharply by Rs 206 per 100 kg or 11.41 per cent to close at Rs 2,010 per 100 kg on July 22 compared to Rs 1,804 per 100 kg quoted on July 1.

Castorseed spot prices in the Mumbai market too jumped up by Rs 245 or 14.04 per cent at Rs 1,990 per 100 kg. Firming of seed prices also helped uptrend in the domestic castor oil market. Castor oil commercial grade was up Rs 57 per 10 kg at Rs 428 per 10 kg compared with Rs 371 per 10 kg quoted on July 1, an increase of 15.36 per cent. Castor oil First Special Grade (export grade) ex-Kandla also shot up by Rs 59 at Rs 430 per 10 kg compared with Rs 371 per 10 kg on July 1, up by 15.90 per cent during July.

"Daily arrivals in north Gujarat were around 10,000 bags (of 75 kg). Overall stocks with big stockists are estimated to be around 1.25 lakh bags to 1.50 lakh bags," another dealer said.

On price outlook, a leading analyst said that prices might react from the current level. Now, second round of rains for major kharif crops such as groundnut and cotton is required. If rains are delayed further, a majority of farmers in Gujarat would opt for sowing castor. Normally, sowing starts in the first week of August.

Castor crop during the season 2003-04 (November/October) was estimated at 6.7 lakh tonnes against 4.5 lakh tonnes during 2002-03.

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