The Hindu Business Line : Castorseed futures likely to fall further — Good crop prospects lead to speculative sales

CASTORSEED futures prices are expected to fall further on continued speculative selling by a few stockists and operators on prospects of good castor crop in Gujarat for the next season.

Castorseed October contracts on the Ahmedabad Commodity Exchange closed at Rs 1,592 a quintal on Saturday, down by Rs 200 a quintal over the last one month, while October contracts at the Rajkot Oilseeds Exchange were down Rs 160-170 to Rs 1,599 a quintal over past one month.

"A few stockists in Gujarat continue to remain sellers, while leading shippers are covering their forward shipments," a leading trader said.

"Export demand for castor oil is good. As a result, shippers are actively buying. Despite the lean period, physical arrivals of seeds into various mandis have continued in the past few days, after reports of good crop prospects," a shipper said.

Average exports of castor oil from Kandla port were over 20,000 tonnes in the last two months. Similarly, exports for the current month is also expected to be around 22,000 tonnes.

"Shippers are well covered and still, they are buying," a local broker said. In Mumbai, castor oil commercial grade was down Rs 25 to Rs 350 for 10 kg past month, while castor oil FSG at Kandla was quoted at Rs 330 for 10 kg, down Rs 20.

Daily seeds arrivals in the current lean period are unusually higher at 25,000 bags in North Gujarat. Arrivals of about 15 lakh bags were reported in the past 15 days and more inflows were expected into the physical market.

On the other hand, castorseed spot prices at Ahmedabad market fell nearly Rs 100 a quintal to rule at Rs 1,590-1,595 a quintal on continued arrivals at the major mandis of North Gujarat.

Area covered under castor crop in the State is 67 per cent of the total castor acreage, up from 52 per cent over previous season.

Futures and ready prices of castorseed may continue to rule lower in the next few days on continued selling pressure, a broker said.

"All eyes are on the opening of December castorseed contracts at Ahmedabad exchange on Wednesday (August 17). The contract is likely to open lower by Rs 30-35 per quintal over August futures," a trader said.

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Castorseed futures likely to fall further — Good crop prospects lead to speculative sales