Castor oil export on growth path, 2.90 lakh tonne likely this year

At a time when overall exports of major agriculture commodities have registered a negative growth in the last few months, export of castor oil and its derivatives has sustained its growth till date and will continue to show positive sign this year.

Total export is expected to reach at 2.90 lakh tonne in the financial year that ends on March 31, the highest in the last five years. Annual exports were below 2 lakh tonne during the last five years. Export has registered a significant growth of around 80% in last ten months and reached 2.71 lakh tonne, up from 1.50 lakh tonne in the same period previous year.

“Castor oil export is expected to be around 17,000-18,000 tonne during February and March 2009 including 10,000-12,000 tonne in bulk cargoes and 5,000-6,000 tonne in containers,” Wamanbhai Udeshi, director, Jayant Agro-Organics Ltd told FE. Total export of castor oil may touch 2.90 lakh tonne in 2008-09 (April-March) from 1.76 lakh tonne actual recorded in 2007-08 with the advantage of depreciating rupee value against US dollar and the higher crude oil prices globally.

Traders expect castor oil export to grow more than 60% during the current financial year over previous year, because of its unique chemical structure that makes it a unique substitute for petrol-based fuels.

“There is some export enquires for castor oil. Recently, a Thailand based importer has booked cargoes of about 400 tonne at $850 per tonne FOB value,” Udeshi said.

International prices of castor oil are currently ruling lower at $1,250 -ex-tank Rotterdam for April/May 2009 shipments-last week from $1,425 per tonne in January 2009.

“Weak rupee value and expected fresh demand from China and Russia may keep prices firm,” a leading exporter said.

In the domestic market, fresh buying from millers and stockists will continue. They are accumulating some stocks at the moment. Total arrivals at major market yards across Gujarat have increased to 45,000 bags (each of 75 kg), a leading broker said. Spot castor oil first special grade prices are quoted around Rs 475 per 20 kg ex-Kandla.

“We expect export demand to generate in coming days, as stimulus packages released by various governments including that by China, our major importer of castor oil is put to work,” analyst with Sharekhan said. The country expects a bumper crop of 11 lakh tonne of castorseed this year.