Castor oil business is one of the powerful marks in the Indian export right from the days of past.Current estimates account for a foreign exchange of Rs:8000 million from an export of over 200,000 tonnes of castor oil for the nation but the trend is not a constant process when a sudden depression was noticed in the castor oil export from India in 2008.The prime reason was an unexpected notification from The Ministry of Commerce,India stating a ban on the export of castor oil and other oils derived from woody tress.It was reported that the files pertaining to the export castor oil were not processed with reference to ban and ultimately made a halt in the exchange of castor goods. The Government on the other hand declared that their decision was with the motto of welfare.It resulted in manufacturers and traders to remain displeased over the existence of prohibition on concerned commodities.
From a mass point of view, the authouritarian’ move may sound positive and optimistic but it does not seem to hold up its credit under all the the circumstances especially with cases like castor as the entire world depends on Indian raw material for generation of industrially potent chemicals.As the responsibilities the export and import partners carrying in their business deal are something immense,they should not be denied and taken as granted by the National Government in the implementation of their emergency policies.So it is on par vital that the Government must realize and understand the commitments of entrepreneurs,traders and business personals in their legal export activities and appropriate negotiations are to be compulsorily executed in advance so as to achieve a timely regulation in export and revenue generation without severe loss for both sides.It is not alone an issue of economics but words of promise and prestige that our exporters vow upon to loyal business colleagues abroad in trading. So circumstances such as this should not arise unless otherwise an extreme condition prevails.
Industrial ventures and merges are in progression in castor oil business currently. As the prices and supply demand continue to surge in this oil sector,bulk manufacturers have obviously realized that it is the collaboration as a strategic tool to cope up with this dynamic trend for a successful run in production of castor oil.
Two Indian castor oil giants namely Adani Wilmar and NK Industries from the Gujarat state have entered into an agreement for joint venture-ship in production of castor oil.As per the press release from the concerned sources,the unit functions under the name AWN Agro Ltd and commences its operation from May.The industrial partners also stated that their production capacity is 3000tonnes oil per day from the current production infrastructures.However no clear information has been presented regarding financial status of the new facility as the managing director of Adani Wilmar,Mr:Pranav Adani claimed that it is quite early to declare fact sheets. The joint proposal was even appreciated by Mr:Vittal Udeshi,Chairman of Jayant Agro Organics Ltd over the business expansion.
It is interesting to watch the business proceedings and the shifts with respect to the availability of raw materials.It seems to be condition tolerated by firms who are well rooted in their respective ventures but is a matter of concern for new entries to achieve a sustainable stand.
For reference: http://m.economictimes.com/PDAET/articleshow/8062780.cms
Castor seed and oil have now firmly been established as products of expensiveness in the industrial market.On May 17,2011 prices of castor bold seed rose by Rs:35 to reach Rs:5175 per quintal from the previous day’s close while the castor oil also showed a marginal rise.Regarding the future price contracts for the June delievery,the prices were oscillating and stood at Rs:4900 per quintal which was also a modest rise by Rs:7 from its previous close.
Castor oil and its related products are industrially expanding to satisfy the mass demands but a price regulation is mandatory. Experts claim that a high price volatility may shift the market to chemicals which prove to have substitution potential.Hence it needs a regulatory framework for sustainable usage of this eco-friendly material.
Castor seed and oil finally saw a drift in its market prices when castor seed bold stood at Rs:5,300 from the previous days close of Rs:5,400 per quintal.The trend was reflected in the castor oil prices as well which fell to Rs:1090 as against Rs:1110 per 10 kg.As the demand was sub-dued from soap industries and shippers, castor seed futures also declined to Rs:5070 per quintal which was about Rs:139 less from its previous close.
A control in the price of castor based commodities greatly relieves the pressure for business exchanges both India and abroad in the current day scenario as it is important to note that prices of castor seed and oil have doubled comprehensively in a brief span of six months.
The price trend of castor seed finally saw a dip when the castor seed March contract fell to US$ 114.695 from the previous close of US$ 117.595 per unit quintal in profit booking at the Rajkot Commodity Exchange. A reduction in spot castor prices has also been witnessed at RCX when the day ended at US$ 115.662 from yesterday’s close of 125.822US$.The castor seed pricing showed a similar suppression in NCDEX as well when the prices fell down to US$120.715 and 115.684 for the February and March contracts respectively.
For further reference: http://www.indiainfoline.com/Markets/News/Decline-in-castor-seed-prices/3561267171
Castorseed futures prices fell by Rs.83 to Rs.4,545 per quintal. This is due to the increased supply in the market and lower industrial demand.
At the National Commodity and Derivatives Exchange, castorseed price for the month of February dropped down by Rs. 83 to Rs.4,545 per quintal, with an open interest of 7,370 lots. Near March-month delivery contract also fell by Rs 70, or 1.61 percent, to Rs 4,277 per quintal, with an open interest of 5,770 lots.
Information obtained from – http://goo.gl/BJzzp
In India, the ministry under Mamata Banerjee has re-classified de-oiled cakes and oil meals from Class 110 to Class 120, effective December 27,2010 which will entail a freight rate increase between 11 and 13 per cent. Since oil cake and meals are used effectively as high nutrient bird and animal feeds, the rise in raw material prices will be passed on to consumers.
Solvent Extractors Association (SEA), in a memorandum to the railways minister and chairman of the Railway Board as well as secretary, Ministry of Agriculture, Commerce, Animal Husbandry and Finance, highlighted that de-oiled cakes were locally produced, traded and occasionally exported on wafer-thin margins. This increase in freight rate would make the production of de-oiled cakes unviable thereby forcing many processing plants to decrease their production and thereafter leading to
De-oiled cakes end-use is in manufacture of compound feeds for cattle, poultry and aqua and also as natural fertilisers and hence such a large increase in freight would place great constraint on the viability of dairy and food industry as well as on the farmers. Also, exports of de-oiled cakes, which face stiff international competition from giants in the US and South America, will be adversely affected. In fact, to compete in the international market, the government has granted a 2 per cent incentive under the Focus Product Scheme for exports of some de-oiled cakes and 5 per cent under Vishesh Krishi Gram Upaj Yojana for castor de-oiled cake. The hike in freight will totally nullify the benefit granted to the exporters of de-oiled cakes and would place them at a great disadvantage.
Commenting on the technical outlook, Dharmesh Bhatia, associate VP-Research, Kotak Commodities Services said the following:
Castor Seed January prices are trading firm and has made a contract high of Rs 4,439, next level is at Rs 4,650. Unless price closes below Rs 4,110, buying is advisable at Rs 4,310-4,360, with stop loss of Rs4,225 and target of Rs 4,610.