Amid large carryover stock and reduced demand, castorseed prices are likely to remain subdued even as the initial kharif sowing in the largest growing State – Gujarat – has remained sluggish.
Analyst estimates suggest an overall castorseed carryover stock in the range of 5-6 lakh tonnes this year, against the total crop of about 13 lakh tonnes last year.
“Huge carryover stock and subdued demand conditions would keep castor prices range-bound. There is no likelihood of upside in prices in near term,” said Biren Vakil of Paradigm Commodity Advisors Pvt Ltd in Ahmedabad. Spot prices hovered in the range of ₹37,500-39,250 a tonne in Gujarat.
Notably, in February this year, the experts from Solvent Extractors’ Association of India (SEA) had projected a subdued price outlook for a period of about 8-10 months amid high inventory.
Gujarat has seen sluggish beginning of kharif sowing. According to the recently-released data of the State government, area under castor was 7,500 hectares as on July 20, which is about 1 per cent of the three-year average of 7,28,600 hectares. Last year during same time, about 10,400 hectares was covered under castor.
“It is premature to comment on the production or price outlook as the sowing is likely to pick up after July or by mid-August. Also, the farmers will decide on their preferences based on monsoon,” added Vakil.