SEA report reduces castor seed output estimates

Total castor seed output in the country would be about 1.27 mt in 2014-15, according to the report

The Solvent Extractors Association of India (SEA)’s fourth round report on the castor seed survey for 2014-15 predicts minor reduction in production, compared with the third round report published in February.

According to the latest report released on Tuesday, total castor seed output in the country would be 1.27 million tonnes (mt) in 2014-15. The report in February had estimated the output to be about 1.29 mt, while at the same time, government estimates had put the output at 1.38 mt.

The survey was undertaken by Nielsen in the first half of April in Gujarat and Rajasthan. It will conduct the fifth and final round of survey in the first week of May.

“Production is estimated to be slightly down in the revised report but overall, we will record higher output compared to the previous year. The market is already at a bottom level and market fundamentals will determine further downfall," said B V Mehta, executive director, SEA, the premier association of vegetable oil industry and trade in India.

According to the new report, castor seed output in Gujarat has been estimated at 1.01 mt, highest in India, followed by Rajasthan with 167,000 tonnes and Andhra Pradesh with 75,000 tonnes. Other states would add 24,000 tonnes to India’s production.

Last year in December, the price of castor seed touched a high of Rs1,100 per 20 kg on the back of lower output estimates. But, following huge supply of new crop and decline in demand, the price has gone down by about 33 per cent and is currently ruling in the range of Rs700-725 per 20 kg.

The price of castor seed depends on demand for castor oil in the international market. This year, the demand has been low. Accoding to SEA data, castor oil export stood at 400,084 tonnes between April 2014 and February 2015 as against 436,482 tonnes during the same period last year. Shipments declined by 36,398 tonnes from India.

An Ahmedabad-based castor oil exporter and trader said, “Castor oil demand from China and Europe is weak this year and there is currently no expectation for any rise in demand. Market is witnessing over-supply on back of substantial production, which may continue to pressurise castor seed price.”

Daily arrival of castor seed in Gujarat is about 125,000 bags (a bag of 75 kg). Traders estimate that price of castor seed might decline to Rs650 per 20 kg in coming days, as fundamentals are not supportive.