Castor oil prices spike 23% in global market
India accounts for 85 per cent of the global castor seed output.
According to industry executives, the price of castor oil in the international market has touched $1,600 per tonne compared with $1,300 per tonne a year ago.
In the domestic market, its price has climbed by 27 per cent to Rs 1,150 per 10 kg from Rs 900 a year ago, though the domestic market is very small as compared with the overseas demand.
“In calendar year 2019, we do not expect exports to go up compared with 2018, when the country had exported 5.5-6 lakh tonnes of castor oil. It may even be less this year due to a shortage in supply of castor seeds,” Abhay V Udeshi, president of International Castor Oil Association, told ET.
India accounts for 85 per cent of the global castor seed output. Its production in kharif 2018 has been pegged at 11.26 lakh tonnes compared with 14.16 lakh tonnes in kharif 2017. Gujarat is the top grower of the oilseed while Rajasthan, Andhra Pradesh and Telangana are other leading producers. Castor, a long duration kharif crop, is sown in July-August and harvested in December-January. Udeshi, who is also the chairman of Jayant Agro, said prices may firm up in the coming months. “We see another 15 per cent rise in prices in the coming months as there will be no fresh stock before January next year,” he said.
The global castor oil market was $1,180 million in 2018 and is expected to touch $1,470 million by the end of 2025, growing at a CAGR of 2.8 per cent between 2019 and 2025, according to international reports.
India exports castor oil to China, Japan, Europe and the US.
“The demand from China has slowed down due to the trade war between US and China. Currently, talks are on between the two nations and we are hopeful of a positive outcome,” said Udeshi.
Castor oil is used to manufacture sebacic acid, a raw material used to produce plastic, lubricants, cosmetics, candles and painting material.