ICOA Update for the United States
Imports, logistics, trade policy and the outlook through year-end 2026
October 21, 2026 | Ravi Shaheed – Acme-Hardesty LLC
Market overview:
The U.S. castor market enters the final months of 2026 with underlying demand intact, but buying decisions increasingly influenced by tariffs, logistics reliability, financing costs and economic uncertainty. Castor remains strategically important across lubricants, coatings, polymers, personal care, pharmaceuticals and other specialty applications.
Official U.S. trade systems publish monthly quantity and shipping-weight data for HS codes associated with castor, but a sufficiently reliable consolidated year-to-date volume was not verified for this update. Accordingly, no import value or volume figure is presented. Available shipment activity nevertheless confirms that imports continued consistently through September, with India remaining the dominant source.
Tariffs and supply concentration:
The central structural issue is U.S. dependence on India, which industry reporting estimates supplies nearly 97% of domestic castor oil demand in the US. The February Supreme Court ruling reduced the headline tariff on Indian goods, including castor products and derivatives, from 50% to 18% to 10%, but later legal and administrative developments created further changes under different trade authorities and there is a cloud looming of up to 100% tariff on Indian goods.
The practical lesson is that tariff exposure must be confirmed by product classification, entry date and the authority in effect at clearance. For the remainder of 2026, continued variability may encourage front-loading, shorter quotation validity and wider differences between some holding lower-cost inventory and some replenishing at current landed cost.
Logistics and ocean freight:
Ocean freight is more favorable to shipping lines and it remains volatile. Tight vessel capacity is putting upward pressure on rates as carriers may protect revenue through blank sailings, idling and slow steaming. Red Sea security remains the largest routing wildcard: many Asia–Europe and Asia–U.S. East Coast services still use the Cape of Good Hope, consuming capacity and extending transit times.
For castor buyers, the risk extends beyond the quoted freight rate. Schedule reliability, transshipment connections, equipment availability, congestion, war-risk insurance, demurrage, storage and inland transport all affect total landed cost. Selective returns to the Red Sea and Suez Canal may shorten voyages, but carrier decisions can reverse quickly if security deteriorates.
U.S. economy and geopolitical implications:
The U.S. economy remains resilient but exposed. Real GDP increased at a 2.2% annual rate in the second quarter after 2.5% in the first. Consumer spending, investment and exports supported growth, but inflation remained elevated: the second-quarter PCE price index rose at a 5.0% annual rate and core PCE increased 3.3%.
For castor demand, positive GDP does not imply uniform strength. Customers may continue operating and investing while becoming more sensitive to working capital, inventory and substitution when imported inputs carry tariff and freight premiums. The Russia–Ukraine war, India’s purchases of Russian energy, Red Sea instability and U.S.–China friction can interact rapidly: sanctions may trigger tariffs, security events may reroute vessels, and policy announcements may distort ordering and port flows.
Year-end outlook and midterm elections:
The base case is continued U.S. expansion with uneven sector performance, persistent price pressure and substantial policy noise. Independent analysis expects full-year growth near 2.5%, followed by a pace closer to 2% over the next twelve months. This suggests a market capable of growth, but not of absorbing repeated landed-cost shocks without customer resistance.
The November 3 midterm elections add uncertainty around trade, inflation, energy, immigration and relations with India. Before the election, policymakers may favor visible measures aimed at domestic industry or consumer prices. Afterward, congressional control will influence oversight, fiscal negotiations, trade legislation and the durability of executive tariff actions. Policy could move toward exemptions for essential industrial inputs—or toward broader duties and enforcement—so companies should plan around decision points rather than one forecast.
Priorities for U.S. castor buyers:
1. Model tariff scenarios: maintain low, base and high duty cases by product and entry date.
2. Protect continuity: hold appropriate safety stock and allow buffers for rerouting, blank sailings and port delays.
3. Measure total landed cost: include duty, freight, insurance, storage, demurrage, financing and inland transport.
4. Preserve flexibility: use shorter quotation validity and tariff pass-through language where appropriate.
5. Improve intelligence: reconcile official quantities with supplier plans, shipment records and internal consumption monthly.
Conclusion. The U.S. castor market is not short of demand; it is short of certainty. Through year-end, disciplined scenario planning, transparent customer communication and operational flexibility will matter more than attempting to predict every tariff or freight announcement.
Wishing all readers a healthy and peaceful end of the year.
Sincerely,
Ravi Shaheed