Spot and future castorseed prices rose sharply on Wednesday following estimates of lower production for the coming year along with a strong demand for castor oil.
On the National Commodity and Derivatives Exchange (NCDEX), castorseed March contracts gained 3.02 per cent or Rs 111 at Rs 3,790 a quintal, with an open interest of 96,960 lots.
NCDEX April contract increased by Rs 111 to Rs 3,877, with an open interest of 80,640 lots.
The castorseed production this year is estimated lower at 11.43 lakh tonnes (lt) against 15.76 lt last year, according to a survey conducted by the Solvent Extractors’ Association of India (SEA).
The fall in production is largely due to drop in acreage in Gujarat.
On the Rajkot Commodity Exchange (RCX), castorseed March contract improved by Rs 95 to Rs 3,850.
RCX spot castor price moved up by Rs 52.50 to Rs 3,577.50.
About 65,000-70,000 bags of castorseed arrived in Gujarat and the price increased by Rs 23 to Rs 705-725 for 20 kg in the mandies.
About 3,700-3,800 bags of castor arrived in Saurashtra and the price quoted was Rs 685-707.
Kedia Commodity Comtrade Pvt Ltd said that the market rallied today on short covering as the open interest dropped by 14.05 per cent, clearly indicating that the rally can test Rs 3,850-3,900 in the next session.
Also support is seen due to lower production estimates for the coming year along with strong castor oil demand.