Hello Friends,
Hope you all have returned to work from your summer holidays and are once again ready to face the challenges emerged out of the ongoing economic and geopolitical scenarios.
India is about to see the withdrawal of its agriculturally / economically utmost important South-West monsoon in coming days. This monsoon plays very important role in India’s oilseeds, pulses, and some grains production.
This year the monsoon rains begun bit earlier for Gujarat in June and then bountiful of it during pre and post effect of the super cyclone BIPORJOY which made landfall in Mid-June, which really made significant contribution to the overall rainfall percentages for Gujarat and Rajasthan the two major castor growing regions of the world. These June -July rains have surpassed 100% of their annual precipitation in some of the districts where castor is grown.
As we all know that August is a very critical and most important month not just for the maximum rains but also for the incremental progress of castor seed sowing in Gujarat. However, due to the ill effects of El-Nino this August month was the worst in terms of rainfall percentage as it proved to be the driest August in the last 122 years in the history of the South-West monsoon in India.
The latest available rainfall data suggest that India may end up this monsoon season with 6 to 7% deficit in rainfall on all India basis and if it remains so then it will be the first deficit year of monsoon after 8 years of normal to excess rains. However as per the data available with IMD (India meteorological department) suggest total rainfall in Gujarat stands at 827.9 mm which is 19% above normal ( 693.8) yet there are districts which are also in deficit rainfall up to 20% below normal, luckily those rain deficit districts are not major castor seed growing regions in Gujarat. There are many dams and reservoirs have been filled with their maximum capacity and the largest dam The Sardar Sarovar overflown in the last week’s rain brought some relief to many after witnessing driest August.
As per the department of Agriculture, Government of India data available till 22nd September This Kharif season (June- October) all India castor seed sowing was conducted in 947K hectares v/s 923K hectares which is up by 2.52% compared to last year. (Gujarat is leading with 714K hectares and Rajasthan with close 180-90K hectares and rest others as on 25.09.2023 available figures)
The supply demand equation looks comfortable this year as the overall demand seems unlikely to exceed 2022 number. Total oil Export from Jan-August has been 410912 M/ts (trade number). The demand for derivative has been sluggish and hence assuming its exports to be close to 80,000 tons from Jan-August and domestic consumption to be around 32000 tons. Total outgo of oil 522912 i.e., 523KT which is equivalent of 1.1 million tons of consumption in terms of castor seeds.
The oil demand for Q-4 may not be aggressive as the sowing numbers reflect indication of good harvest (subject to weather, farmer’s decision, prices of peer commodities etc.) at least similar to the current year. The second round of rising energy prices in EU with winter approaching, rise in crude oil prices and thereby rising inflation in many countries will be dampener for any possible rate cut either in EU / UK and other parts of the world already suffering with higher interest rates/ rising cost. The overall demand for oil & derivatives combined both internationally and domestic put together expected to remain around 760KT which is equivalent of 1.6 Mn tons of seed, out of the total available seeds of 2.0mn tons for the year 2023 hence based on this number we may expect to go into 2024 with a carry in of 400KT seeds.
Lastly, I wish you all, very good luck, abundant success and good health always.
Below is the probable balance sheet of castor seeds for the year 2023:
*some figures are based on my personal assumption*
| OIL EXPORTS JAN – AUG | 410912 | |||
| DERIVATIVE EXPORTS JAN-AUG | 80000 | |||
| DOMESTIC CONSUMPTION JAN-AUG | 32000 | |||
| 522912 | ||||
| EXPECTED OIL EXPORTS SEP-DEC | 180000 | |||
| EXPECTED DERIVATIVES EXPORTS SEP-DEC | 45000 | |||
| EXPECTED DOMESTIC DEMAND SEP-DEC | 12000 | 237000 | ||
| 759912 | ||||
| TOTAL EXPECTED OIL COSUMPTION 2023 | i.e | 760000 | ||
| Castor seed crop 2023 | 1.85 mn/T | |||
| carry in 2023 | 0.15 mn/T | |||
| total available | 2.00 mn/T | A | ||
| TOTAL EXPECTED SEED CONSUPMTION 2023 | 1.61 mn tons | B | ||
| CARRY IN FOR 2024 in terms of seeds ( A-B) | 0.4 mn tons approx. | i.e 400KT | ||
By: Kandarp Padh, Gokul Agro Resources, Ltd.
*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.*