China fuels castorseed prices

Castorseed futures made a smart recovery of Rs 88 (7 per cent) in the last fortnight to Rs 1,552 per tonne on the back of huge Chinese demand and paucity of rains in the major producing centres, including Andhra Pradesh, Rajasthan and Gujarat.

In the spot market on Tuesday, the castorseed was quoted at Rs 1,630 per quintal in Mehsana, Gujarat.

"Although, the rains are delayed by a fortnight, the production will not suffer at all," said BV Mehta, an office-bearer of the Solvent Extractors' Association of India.

India is exporting 40,000-50,000 tonne of castorseed to China and this year the supply is going to surge to 75,000 tonne.

India produced about 9.1 lakh tonne of castorseed in 2005-06 against 8 lakh tonnes in the previous year. Of this, Gujarat contributed 5.7 lakh tonne (about 70 per cent) while Rajasthan and Andhra Pradesh shared 1.5 lakh tonne and 1.6 lakh tonne, respectively.

The most important factor helping the current price rise is the shifting of 5-7 per cent castorseed farmers to sugarcane sowing due to better realisation. Hence, the crop may be 5-7 per less this year, noted Mehta. India is the world leader in castorseed and dominates the global castor oil trade.

The domestic variety of castorseed has 48 per cent oil content of which 42 per cent can be extracted, while the cake retains the rest. Huge stocks lie in Vyaj Badla which need to be covered up. Therefore, traders are rushing towards positioning themselves for future use, said Gujarat-based trader.

The annual domestic consumption of castor oil in India is about 2,00,000 tonne. Of this, the soap industry consumes about 50,000 tonne, the paint and allied industries 70,000 tonne and the lubricant and derivatives industries 40,000 tonne.