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Castor seed futures on NCDEX was the top gainer during the week ended March 17, 2017. Most active April contract rallied higher to end the week at ₹4,561 per quintal against the previous week’s closing of ₹4,280 per quintal, making a gain of 6.56.
A fall in supply across major markets and rise in demand from domestic traders led to a rally in prices. Domestic crushers increased the purchase in anticipation of rise in export demand for castor oil and castor meal.
The oil content of the new castor crop is good, which also spurred crushers to procure the commodity for their immediate requirement.
Meanwhile, demand from traders as well as exporters has improved, as they anticipate that commodity prices are not likely to fall in the near term.
Castor seed production is expected to decline by 25 per cent to 10.67 lakh tonnes in 2017-18 against 14.23 lakh tonnes in 2016-17. Production in Gujarat is expected to decrease by 27 per cent to 8.16 lakh tonnes during the current season as compared to 11.73 lakh tonnes in the previous year, as farmers have shifted to groundnut, cotton and pulses due to better realisation.
For the coming week, castor seed futures contract may continue to trade on a higher note on expectation of improvement in export demand for castor oil and castor meal from major importing countries such as the US, China and Brazil. Prices will also be supported by farmers holding their produce on expectation of higher price in the future
The writer is Head-Commodity Research, Karvy Comtrade
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