The Castor market was under pressure during the previous month mainly because of lower consumption and weak tone in the major oilseeds basket. Sentiments were eased also because of the approaching harvest season. When compared with the November end level (Rs.6400/QTL approximately), the prices were down nearly 500 rupees on a quintal by end of December 2021 (Between Rs.5875 and 5900/QTL).
Nevertheless, the commodity was still up roughly Rs.1500/QTL versus December 2020 average prices (Rs.4400/QTL). The upward journey resumed from January 2022 onwards and prices have appreciated by more than Rs.300/QTL from December 2021 end prices. Currently, the market offers of superior grades are available around Rs.6250/QTL.
Castor is an important non-edible oilseed, and basically a cash crop. It is cultivated across the globe because of the commercial importance of its oil. It is reported to have originated in the tropical belt of both India and Africa. Castor seed planting takes place during July-Aug. Under certain circumstances, it can be sown even during September. Harvesting starts usually in December or January and extends till April. Gujarat is the largest Castor producing state followed by Andhra Pradesh and Rajasthan. Castor is an annual crop and requires moderately high temperatures with low humidity throughout the growing season.
Traditionally, Castor is a Kharif season crop, and the time of planting depends on the onset of the monsoon. Generally, Strong demand amongst retailers and stockists favored the price rise for castor. The estimated consumption is around 19-20 LT. Expected production plus the carryover inventory maybe just near to 20-21 LT (a tight supply situation indeed, if the estimates are in line with the actual figures) Because of a neck to neck demand-supply estimates, the price outlook of castor is positive for 2022, and we expect prices to cross 7000 level in next few months.
Castor seed is processed to produce oil, with the average recovery rate being 46%. Castor oil is rich in triglycerides called ricinolein and is the largest vegetable oil exported out of India. India is the leader in global castor production and dominates in the international castor oil trade. The traditional use of castor oil is for medicinal purposes and as a general industrial lubricant.
In the present term castor oil and its derivatives have applications in the manufacturing of soaps, lubricants, hydraulic and brake fluids, paints, dyes, coatings, inks, cold resistant plastics, waxes, and polishes, nylon, pharmaceuticals, and perfumes. Castor meal is the by-product of the oil extraction process and is used mainly as organic fertilizer due to its rich protein content. But it cannot be used as cattle fodder because of its toxicity (due to the presence of `ricin’).
Advice for Farmers and Traders/Stockists:
At present, the average offers for the superior grades are available around Rs.6200-6250/QTL. Going by our inference a price appreciation of at least Rs.750-1000/QTL is expected in the next 2-4 months. Farmers are therefore advised to hold their produce and wait for offers of Rs.6900-7000/qtl at least. On the other hand, the stockists or traders should look forward to starting their purchases at current prices, and buy further in case a dip of Rs.75-100/QTL occurs.
The harvest season has begun which may put pressure over the price levels. This means there is a scope for getting the new season supplies at a cheaper price. The target for selling the commodity should be above Rs.6900/7000 per quintal.
