Higher Production Estimates Continue to Exert Pressure on Castor Seed Prices

Mintec Global
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The Outlook of SEA

The castor seed market is experiencing a downturn, primarily due to a substantial 11% increase in production estimates for the current season. Following the Lok Sabha elections, there has been a notable surge in the daily arrivals of castor seed in Gujarat’s markets. Data from the Solvent Extractors Association of India (SEA) indicates that the estimated production for the 2022-23 crop season is 1.881 million tonnes. Reflecting an 11% rise from the previous year’s 1.694 million tonnes. Despite this, recent market data from Gujarat shows stable prices. Suggesting a complex movement between supply and demand in the castor seed market.

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Anticipated Slow Price Growth

Industry experts are sounding a note of caution about a potential slowdown in price growth, primarily driven by the substantial production estimates and the anticipated surge in arrivals. This situation points to an impending price adjustment as supply starts to exceed demand. A trend that stakeholders need to be prepared for. Despite the pressures on domestic prices, castor oil exports are notable for their resilience. February saw a significant uptick to 56,561 tonnes compared to 47,340 tonnes during the same period last year. Over the initial two months of the current year, January and February, castor oil exports soared to 107,508 tonnes. Reflecting a steady upward trajectory, albeit with some fluctuations in export value.

In conclusion, industry experts anticipate a potential slowdown in price growth due to the substantial production estimates and the expectations in arrivals. This foretells an imminent price adjustment as supply surpasses demand, underlining the need for stakeholders to prepare for this shift. Despite the challenges posed by domestic price pressures, the resilience of castor oil exports is evident. With notable increases observed in recent months. This resilience suggests a promising outlook for the castor seed market. Albeit with fluctuations in export value, stakeholders should monitor closely.