Chinese buyers heat up local castor oil market

Procuring interest driven by Tung crop failure.

With the country having registered a deficit of at least 2 lakh tonne over the previous year level in castor crop "� which is likely to drive up the prices in the near future "� and following the failure of Tung crop in China, buyers beyond the Great Wall have started procuring their non-edible vegetable oil requirement from India. They are busy buying castor oil, in lieu of Tung oil.

Again, with this year poised to see a deficit of 95,000 tonne in edible oil, traders are optimistic that castor oil prices will surge.

The country saw only 7.25 lakh tonne castor crop this year compared with the 9.5 lakh tonne mark touched last year. So fearing that higher demand would heat up the market, Chinese buyers have entered the country to procure their requirement "� at an early stage.

"A few days ago, 4,500 tonne of castor oil was indented by Chinese companies at a price of $970. This followed the opening buying of 2,500 tonne castor oil a month earlier, which was also purchased in the same pricing pattern," said Harilal Chaganlal, a prominent city castor trader.

Explaining the possible reasons of China eying India for outsourcing its vegetable edible oil requirement, Chaganlal said, "Chinese people consume Tung oil for non-edible applications, which is equivalent to castor oil produced in India. As Tung crop has failed miserably in China this year, buying of castor oil by Chinese buyers is now getting reflected in the transactions of castor traders."

The castor oil market has generally remained steady for the past few days. At present, the domestic market is quoting castor oil in the range of Rs 1,912-1,920 a quintal, even as the international market prices are fluctuating between $920 and $925 a tonne.

Demand based on anticipated lower output in both the markts "� domestic and international "� is likely to heat up castor oil prices in the coming 30-40 days. Besides, the climate has also played a strong role in creating a huge demand-supply mismatch.

"The recent change in climatic conditions "� excess cold across the northern belt "� has damaged almost one-third of castor production in Rajasthan," said Rajendra Pobaru, president of Rajkot Oil Seeds & Bullion Merchants Association.

"Also, arrivals of castor in marketing yards are not pacing up. This is likely to add to supply crisis, further strengthening the demand and, hence, the prices. Castor oil is surely going to flare up in the coming days," he added.

Given the current demand-supply scenario, worldwide, global buyers eyeing India to procure their castor requirement, after Brazil which has posted good castor crop this season. China alone was targeting to buy at least 60,000-65,000 tonne from India, Pobaru said.

"The castor oil prices "� currently in the $920-925 a tonne range "� are likely to scale up to the $970-980 mark by February-end in the international market," he said.

"In the domestic circuit, castor oil "� currently trading in the range of Rs 1,912-1920 a quintal "� is likely to touch a high of Rs 2,200-2,300 a quintal," he added.

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The country saw only 7.25 lakh tonne castor crop this year compared with the 9.5 lakh tonne mark touched last year

Demand based on anticipated lower output in both the markts "� domestic and international "� is likely to heat up castor oil prices in the coming 30-40 days

As Tung crop has failed miserably in China this year, buying of castor oil by Chinese buyers is now getting reflected in the transactions of castor traders

A few days ago, 4,500 tonne of castor oil was indented by Chinese companies at a price of $970