Castor oil is used as grease and lubricant in the auto industry.
Slowdown in auto sector is likely to impact castor oil demand in the international market. Castor oil finds various applications in the auto sector and it is especially used as grease and lubricants.
Castor seed traders believe that the auto sector slowdown coupled with global turmoil may affect adversly the export of castor oil from India this year.
"The on going recession has taken its toll on the demand of various agri commodities and sluggish trend in auto sector will further dampen the demand of castor from India," said BV Mehta, executive director, Solvent Extractors Association of India (SEA).
"There is no significant demand in the foreign markets and no deals are being struck at present. The export of castor and its derivatives this year is expected to decline by around 20 to 25 per cent," said Pravin Thakkar, president, Ahmedabad Commodity Exchange (ACE).
As per the data available with the traders, India produced 3.50 lakh tonnes of castor oil in 2007-08, of which around 2.70 lakh tonnes of castor oil was exported to various countries.
It may be mentioned here that castor seed prices in the spot markets touched a record level of Rs. 630 per 20 kg last year.
In the wake of castor oil also finding applications in other industries such as medicine and paint industry, some traders believe that even current economic slowndown is not likely to have significant impact on the demand of castor oil in the export market.
However, they also admit that the slowdown may bring down the export of castor oil by around 5 to 10 per cent.
