The Hindu Business Line : Castorseed futures prices may recover on speculative buying

DESPITE reports of good sowing progress in all the three major producing states, castor seed futures prices may recover from the present level following continuous speculative buying by a few leading operators, reduced stocks and sustained export demand for castor oil.

Major producers of castor seed in the country are Gujarat, Rajasthan and Andhra Pradesh.

Castorseed December contracts prices at the Ahmedabad Commodity Exchange (ACE) fell 4.2 per cent or Rs 82 to close at Rs 1,820.50 a quintal on Thursday as against opening rate of Rs 1,902 on August 17 — first day of trading for December delivery.

Spot prices of castorseed ruled higher at Rs 1,890 a quintal on Thursday, compared with Rs 1,770 on August 2

December contracts prices are ruling lower than October contracts on initial reports of good sowing in the three major-producing states.

"Spot market is ruling higher by Rs 70 per quintal than the December contracts on reduced stocks. On the other hand, running October contracts prices were quoted at Rs 1,891.50 per quintal on Thursday, almost at par with spot rates," a leading local broker said.

"New arrivals in Gujarat will start late, say around December, as sowing is still in progress. Normally, new season arrivals starts around Diwali. Sowing is good in the State as north Gujarat received late rains but adequate. News arrivals from Andhra Pradesh will commence late around first week of October," a Mumbai-based leading oil miller said.

"Overall sowing scenario in Gujarat, Rajasthan and Andhra Pradesh is good. Looking to present situation, castor crop is expected to be higher than the last season," an Ahmedabad-based broker said.

"It is difficult to say exact stocks figure but stocks-on-hand of roughly 20 lakh bags (each of 75 kg) are lying with major stockists in Gujarat. Export demand for castor oil and derivatives is steady. China buys in small quantity. Traders expect fresh buying from Europe after the exact crop picture emerges," a leading castor oil exporter said.

Current castor oil price is around $915-$920 per tonne on f.o.b basis. Ex-Rotterdam price is ruling at $1,050 per tonne.

Castor oil export during the first five months (April-August) of the current financial year 2004-05 is expected to increase to 1,00,464 tonnes as against 77,912 tonnes in the same period last year, up by 29 per cent. Export during the year 2003-04 was reached at 1,61,619 tonnes as against 1,63, 862 tonnes in 2002-03, down marginally by 2,243 tonnes.