Castor seed to profit in near-term on demand
http://www.jimandaz.com/indian_news/33/castor_seed_profit_near-term_on_demand.html
Bullish momentum is expected to continue in castor seed as demand recovered sharply in current season. Most of the trade participants feel that prices of the commodity will head higher in coming months, high premium on recently launch RBOT September contract over front month June contract vindicates the trade view.
Demand, which was sluggish last year gathered pace this season on back of recovery in economies across the globe, but domestic production declined by around four percent. China's demand seen robust as it has increased production of sibesic acid which is a derivative of castor oil and used in textile, polywool, rubber and paint industry. Demand of sibesic acid is rising in the global market and China is the only producer in the world.
China bought 54,000 tones of castor oil from India during January-April, 2010 compared 23,000 tones same period last year pushing total export of the country to 1,35,00 tones. Imports of European countries also rose sharply to 50,000 tones from 33,000 tones. India is the largest producer of castor seed in the world with a share of around 60 percent. It is also the largest exporter of castor seed oil.
According to a leading exporter demand from China, Europe, USA and Japan will keep on rising till August, 2010. Prices of castor oil jumped $ 50 per ton on high demand within a fortnight reaching to all time high. Prices of May-June delivery quoted at $ 1750 per ton and July-September delivery at $ 1870 per ton in Rotterdam, benchmark market of this oil. Tung oil, a substitute of castor oil also witnessed bullish momentum and its prices surged to $3530 from $ 3450 per ton during same period.
Domestic castor seed production in 2009-10 pegged at 9.34 lakh tones, four percent lower than last year. Due to higher export demand of oil, almost 70 percent of the crop has already been crushed. Millers are crushing 65,000 bags everyday while daily average arrival is 50-55,000 bags only. Monthly demand of castor oil is around 50,000 tones and for getting this much oil 60,000 bags of seed have to be crushed every day, which is not possible now days due to thin arrival and there is no chance of increasing the same in the near future.
Given the tight supply and higher demand, it is unlikely that castor seed prices will come down. Castor seed September contract in the Rajkot Board of Trade was quoted at a Premium of Rs 140 against front month June contract indicating continuation of bullish trend in coming months. Castor seed prices are currently ruling at Rs 3,100-3,150 per quintal, traders expect prices may gain Rs 50 per quintal in near future.
Posted On : 31 May 10
Introduction
The castor oil plant, Ricinus Communis, is a species of flowering plant in the spurge family, Euphorbaceae. Its seed is called castor bean and it is the source of castor oil. Although castor is indigenous to the Egypt, Ethiopia and India, today it is widespread throughout tropical regions such as China, Brazil and Thailand.
Although the seeds are extremely poisonous, they are the source of numerous economically important products, such as lubricant for aerospace industry and are one of the earliest commercial products. To many people the castor plant is just an overgrown, undesirable weed and yet it produces one of neture's finest and economically important natural oils.
Global castor seed production is more than 1.5 million tons per year. The major producing countries are India (with over 60% of global yield) follow by China, Brazil and Thailand.
Although the seeds are extremely poisonous, they are the source of numerous economically important products, such as lubricant for aerospace industry and are one of the earliest commercial products. To many people the castor plant is just an overgrown, undesirable weed and yet it produces one of neture's finest and economically important natural oils.
Global castor seed production is more than 1.5 million tons per year. The major producing countries are India (with over 60% of global yield) follow by China, Brazil and Thailand.WHY GROW CASTOR ?
| · Short harvesting period of 120 days. |
| · Minimum 3 harvests per annum |
| · Average production of 8 MT per acre/annum |
| · Perennial crop of minimum 5 years |
| · A buy back Agreement |
| · Castor plantation can improve soil and environmental quality |
COMPARISON BETWEEN CASTOR AND OIL PALM
| | Oil Palm | JATROPHA | CASTOR OIL |
| | | | |
| Planting Cost per | 7,000 | 5,000 | 5,000 |
| | | | |
| Nursery Period | 9 Months | 2 Months | 0 |
| | | | |
| Flower & Fruiting | 3 Years | 6 - 9 Months | 4 Months |
| | | | |
| Yield per | 14 MT | 4 MT | 8 MT |
| | | | |
| FFB / Seed Price | USD150 per MT | USD200 per MT | USD375 per MT |
| | | | |
| Oil Extraction Rate | 20% | 32% | 50% |
| | | | |
| Crude Oil Price | USD750 per MT | USD 800 per MT | USD1,500 per MT |
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