Crusher demand to firm up castor seed prices

Castor seed spot and futures prices are likely to be firm in the coming week as the demand from crushers is on the rise, traders and analysts said.

"Castor seed demand from the crushers is high at the moment. Almost all the daily arrivals are being consumed by the crushers. The arrivals have gone up, but the demand from crushers will keep the prices firm," said Rajan Shah, research analyst, Anagram Comtrade.

Prices may go down temporarily, but the recovery will be swift, traders said. Daily arrivals have risen this week. However, the arrivals are not as much as the traders expected.

Daily arrivals in Gujarat and Rajasthan markets combined were around 60,000-65,000 bags (1 bag=70kg) against 45,000-50,000 bags in the previous week."The daily arrivals will increase after April 15. They can go up to 75,000-80,000 bags a day," said a trader.

However, traders believe the arrivals are not likely to have any immediate impact on castor seed prices as the demand is said to be very high from the crushers.

The most active May castor seed contract on National Commodities and Derivatives Exchange is likely to trade in the range of Rs 515-542 per 20 kg. The contract was traded at Rs 540.50 per 20 kg at 1:51pm, up Rs 4.50 from Thursday's close.

"The May contract on NCDEX is likely to trade firm during the week starting from Monday," said Prakash Mehta, a local castor seed trader.

But the trend will remain firm. On the higher side, the May contract can go up to Rs 542 per 20 kg," said Prakash Mehta, a local castor seed trader. He said the increased arrivals can pressurise the prices to a low of Rs 515-520 per 20 kg. "However, the weakness will be very temporary. There will be swift recovery."

Castor seed is also likely to track other edible oilseeds including soybean and mustard, which are seen steady-to-firm over the next one week.

"Castor seed contract will get support from other edible oilseeds which are seen firm," said Ruchi Shah, a research analyst.

Traders expect the prices to remain unchanged despite the rising arrivals, providing a good base to the futures. "Castor seed prices are Rs 520 per 20 kg and will remain unchanged during the week starting Monday. Most of the arrivals are being absorbed by the crushers," said Nilesh Shah, a trader.

Castor oil exports have resumed after the Centre issued a clarification on April 1 regarding the confusion about castor seed oil exports.

The customs department had stopped castor oil exports on the commerce ministry's decision to ban the export of all edible oils. Castor oil is a non-edible oil and hence, outside the purview of the ban.

"Exports have resumed from the Kandla port. However, the shipments being dispatched are old commitments and no new deals are being struck," said Mehta.

Total exports from Kandla port remained around 10,000-11,000 tonne in March, down from 15,000 tonne in February.

Demand for castor oil from China and Europe continues to be good, but there are no fresh deals.

India annually exports around 200,000 tonne castor oil. The country's edible oil marketing year runs from November to October.

International buyers are willing to buy British Standard Specification castor oil at $1,385-1,390 (Rs 55,316.80-55,516.60) per 1 tonnen on free-on-board basis.

Exporters at Kandla in Gujarat are seeking $1,400-1,425 (Rs 55,916.00-56,914.50) per 1 tonne.

Kandla port is the main centre for castor oil exports.