According to market sources here, this is perhaps the largest default in recent times and is likely to affect several leading oil mills of north Gujarat, private shrofs as well as some Mumbai-based players too. However, sources also maintain that no action is likely to be taken against the defaulting trading house in view of the fact that the affected parties are not in a position to lodge criminal suits against the erring party since the transactions were done through the illegal route of super trading or cash payment basis and not through the legal H form route.

Market sources, however, apprehend that the development is likely to cast a temporary shadow over the castor oil market specially since the sellers will be chary of selling in super. And since most buyers prefer tobuy oils in super, there will be a virtual paralysing of the super trade for some time now. This, in turn, is likely to depress castor oil prices for the next few weeks since both buying and selling in super are expected to come to a virtual standstill.

Gujarat produces an estimated 2.50 lakh tonnes of castoroil and is the largest producer of the commodity both domestically as well as in the international arena.

In view of this, market analysts feel exports are also likely to dip in the short-term.

On the flip side, though, some millers have voluntarily decided not to deal in super. And if the numbers of those dealing through the conventional H form route swell which is dearer by Rs 3 to Rs 5 on account of sales tax imposed by the government, the coffers of the state government are expected to gain since revenue on account of sales tax would witness an increase too.