Hello, members and readers hope you all are fine!
It seems that the world is getting back to normal with people moving around and travelling freely. Tourism once again flourishing, hotels are packed, wedding bells are ringing again, but there is something which still not coming back to normal, the feeling of uncertainty.
The COVID situation in India and, in most parts of the world, these past few weeks seems to be improving. With vaccination numbers of more than one billion people in India, I am cautiously daring to say that we have so far been able to come out of the woods, as far as new Covid infections are concerned. The average number of new cases in India have been steady at around 13,000 to 15000 infections per day. The casualty rate, however, is still about 800 people as of 28th October. The daily discharge rate is about 13,200 people among the total active cases of more than 161K. Everyday India administers vaccines to about 7.5 million people which is a substantial number that has crossed a 1.04 billion mark for the total vaccinated persons within the country. As far as economic activities are concerned, we have not seen any restrictions which can impact businesses in any significant manner. However, there are still night curfews and some services that have partially opened with 50% capacity such as gyms, swimming pools, theaters, and multiplexes. Schools have opened for some age groups and so have colleges. There are some statewide travel guidelines, but by and large, we see that travel seems to be booming as most people want to make up for the lockdown confinement.
Let us now move to our dearest subject of ever, the mysterious CASTOR.
Castor seed sowing for 2022 harvest has been completed all over India and with the help of very good rains in September. Overall, acreage for all of India has reached about 825K hectares, this number is almost close to last year’s sowing figures which is good. However, due to late rains in major castor growing areas, the sowing got delayed and harvest may now be delayed for a month or so. It is bit early to talk about the expected yields from the current sowing, however, due to late sowing, insufficient local water reserves, and a slightly hotter October then normal, we may not augur well for the higher yields. Yet we need to see how winter pans out, and how much water is released in the canals from the Sardar Sarovar dam of the Narmada River for agriculture usage.
Export numbers from India have been encouraging this year, as China bought some very good quantities, as we all know in Quarter 2 of 2021, though the follow up buying from that part of the world slowed down a bit for having higher stocks and reduction in demand for byproducts in their domestic market. Castor oil exports from India as of 30th September 2021, according to the trade figures, have clicked 516K tons, while derivative exports around 108K tons and domestic consumption could be around 45K tons so far. That makes a total oil consumption of approximately 669K tons. The demand from the EU & USA have been consistent and somewhat higher than the last year. China has so far bought about 261K tons in the last 9 months which is still considered significantly higher ( about 22% more ) and there are still 3 more months to go for this calendar year.
New Developments once again from China!
One of the major events after Covid, which also is currently in focus, is again from China and it’s about the “double control measure”, as they say, has been implemented in China which is to partly tame the growing energy crisis emerged from the poor coal supply for power plants, and also to curb the pollution ahead of Winter Olympic which is going to held in Beijing in February 2022. The coal supply crunch resulted in huge load shedding in many provinces, particularly in Industrial areas and industrial parks, which were asked to shut down to maintain power supply and load demand equilibrium. This also impacted many castor oil buying companies, as their end product and byproduct demand fell substantially. There is still no clarity on when things will go back to normal, and hence even when the earlier bought excess inventory of castor oil, it seems to be ending in China, yet there is not much demand coming from them due to uncertain domestic environment, however, some trade keeps happening at discounted prices. The impact of the Chinese industry shutdown is not just limited to their domestic demand disruption, but it has also impacted many parts of the world, especially with some chemicals which are not coming from China and therefore impacting costs of many raw materials and finished goods in India and across the world. The ongoing energy crisis is not just limited to China, but it is also impacting the EU and other countries that are dealing with high natural gas pricing and supply crunches.
What lies ahead?
Last year’s crop was estimated to be 1.7 million tons and carry in was 450K tons. However, with decent prices through the year and super remunerative prices in the last few months, the seed arrivals were not visible in the market the way it should have been under such a lucrative price regime, and we are seeing a decrease in availability of seeds as we move into the critical months of November and December. Either farmers are still holding a large amount of the seeds, or they are just not there. The exchange warehouses have no more then 50K tons of seeds. The last 3 months of export, and delayed season, may certainly have caused a supply crunch, unless farmers bring seeds in ample quantity during November – January. China has been quiet for some time, but with coal supply now easing a bit and industries starting to function, they may need to buy oil for their immediate requirements, as castor oil stocks in China are also decreasing. The demand for castor meal has been fairly good within and outside India, and we have witnessed historical high prices of castor meal with levels close to 200 USD/MT FOB in bulk. The high protein castor meal has also seen historical levels of almost 400 USD/MT FOB, which helped millers to maintain crush margin for some time despite very high seed prices. Castor oil FOB IN BULK prices touched 1800 levels and with the end of the season we need to see how the demand – supply equilibrium is maintained going forward. It has been a highly rewarding year for the farmers of Agri commodities, now it remains to see how 2022 unfolds.
Lastly, many of us may have lost dear one, a friend, a colleague, or a relative and it could be the shock of a lifetime. However, we are built to be resilient, we fight for survival of self and our families, I would end this Newsletter with a wonderful Poem by Kitty O’Meara, “ In the Times of Pandemic”, which ends with a touch of healing and hope and with that I WISH YOU ALL A HAPPY DIWALI & A VERY HAPPY NEW YEAR IN ADVANCE FOR 2022 !!! Kandarp Padh, Gokul Agro Resources, Ltd.
In the Time of Pandemic
And the people stayed home.
And they read books, and listened, and rested, and exercised, and made art, and played games, and learned new ways of being, and were still.
And they listened more deeply. Some meditated, some prayed, some danced.
Some met their shadows. And the people began to think differently.
And the people healed.
And, in the absence of people living in ignorant, dangerous, mindless, and heartless ways, the earth began to heal.
And when the danger passed, and the people joined together again, they grieved their losses, and made new choices, and dreamed new images, and created new ways to live and heal the earth fully, as they had been healed.