Castor Market Prediction – April 2024
I hope this correspondence finds you well. I am writing to provide a formal overview of the current and projected conditions in the castor market for the year 2024, based on recent developments and analysis.
Production Analysis:
As of January 1st, the projected castor seed production for the new year stands at 19.75 lakh metric tonnes. Additionally, there is a carry-forward production from 2023 of 1.5 lakh metric tonnes. Thus, the total crop available for crushing in 2024 amounts to 21.25 lakh metric tonnes.
Export and Crushing Activities:
From January 1st to March 31st, approximately 2.35 lakh metric tonnes of castor oil and derivatives have been exported worldwide. Consequently, 5.55 lakh metric tonnes of seeds have been crushed to meet these demands. As of April 1st, there remains a balance of 15.17 lakh metric tonnes of seeds available for crushing to fulfill the requirements of the castor oil industry.
Monthly Crushing Patterns:
Historically, major crushers have been processing 1.75 lakh metric tonnes of seeds per month, in line with past consumption patterns.
April Market Projections:
Market projections for April indicate an estimated arrival of 4-4.35 lakh metric tonnes of castor seeds in the market. However, the projected demand for April is 1.75 lakh metric tonnes, resulting in an excess supply of approximately 2.5 lakh metric tonnes. This surplus is expected to exert downward pressure on the market, with future prices anticipated to range between 5500-5700 per quintal. Consequently, industry stakeholders are seeking to procure seeds at these levels to meet future consumption needs.
Impact of Weather Conditions:
The market outlook for the second half of the year will be influenced by weather patterns, particularly the onset and performance of the monsoon. Current forecasts from Skymate suggest a normal monsoon at 102%. However, early monsoons may prompt farmers to prioritize sowing of edible crops over castor seeds, potentially leading to reduced sowing for the next year. This anticipated decrease in supply could provide support to the market in second half of the year, with future market prices predicted to be in the range of 6500-6700 per quintal. Overall, a steady demand is expected throughout the year. So oil prices would range between 1415 dollar FOB to 1625 dollar FOB INDIA for the year.
In conclusion, the castor market is subject to various factors, including production levels, export demands, and weather conditions. While short-term pressures may lead to bearish tone,the market is anticipated to stabilize in the long run, supported by consistent demand and potential supply constraints.
Dharmendra sinh Rajput
MD- Gokul Overseas
*The opinions expressed in this newsletter are solely those of the author and do not necessarily reflect the views of The International Castor Oil Association.*