Castor Markets Gain More Than 300 Rupees in Previous Week: Upward Trend Likely to Continue

Castor Seed markets have shown a respectable recovery during the recently ended week. The market was under pressure during the later days of February mainly because of lower consumption and weak tone in the major oilseeds basket.

Sentiments were eased also because of the approaching supply season and rise in selling by the stockists and farmers on receiving good prices against their purchase and production costs respectively. When compared with the February end prices the commodity has appreciated by more than 300 rupees on a quintal, and the commodity is presently trading with a premium of roughly Rs.2800/qtl, when compared with the December 2020 prices. 

Castor seed has shown a significant price appreciation year on year, because of the tightening supply and stable demand situation. The estimated consumption for 2021-2022 is around 19-20 LT. For the same period the expected production plus the carry over inventory may be just near to 20-21 LT (tight supply situation indeed, if the estimates are in line with the actual figures). 

The new season supply shall commence in the next few weeks but most traders do not expect much fall from the current levels due to a tightening supply-demand balance sheet. Selling interest is higher in the spot markets presently since farmers and traders are offloading their stocks regularly as they are getting decent returns against their purchase costs.

Because of a neck to neck demand supply estimates, buying interest is expected to be quite healthy amongst market participants as of now.

All in all, there will be higher chances for a sharp price correction in coming weeks, but prices will tend to recover because buyers will be ready to stock the commodity, considering the probability of selling the commodity at a later stage, in case prices surpass the Rs. 7500/qtl level. Market talks indicate that castor seed may reach Rs.8000/qtl in next few months.