Castor seed is an oilseed crop of the non-edible variety and is used to make castor oil and its derivatives. Products extracted from the castor seed are used to process a vast array of commodities like perfumes, cosmetics, hydraulic and brake fluids, paints, surface coatings, inks, plastic, waxes, soaps, toiletries, pharmaceuticals, medicines and lubricating formulations. Castor oil is used in either its raw form or in a refined style to make these products. The MCX base trading unit for castor oil is ten metric ton, while the maximum order size is 500 metric ton. Castor seed prices depend on a variety of factors which are discussed below. All these factors ensure that the castor seed live price remains fluttering. The Castor seed price in India currently is INR 4,360 per 100 kgs.
Cultivation and Production
The castor plant is grown in arid and semi-arid regions, and India is one of its primary producers, followed by Brazil and China. Thirty countries cultivate castor globally, and the annual production of castor seed amounts to 15 – 20 lakh tonnes. Almost all of the castor seed in India is cultivated in Gujarat, Andhra Pradesh and Rajasthan. India is a world leader in castor seed production and plays a vital role in the trade of castor oil internationally. The fact that India has low domestic consumption of its castor seed production leaves the majority of its produce free for exportation. China, the US and Japan are key importers of castor oil from India.
Factors Affecting Prices
The domestic scenario of the demand and supply, competitiveness between the prices of different crops, cost of production and the current international prices are some vital factors that influence the castor seed prices and that of its derivatives. Weather conditions, diseases and pests are risk factors connected with every agricultural crop, and it affects the castor seed price in India too. Government regulations on import and export, prices of competitive oils and currency fluctuations also impact the castor seed prices. Development of new uses of castor oil and substitutes of castor oil can both have an impact on its price.
Risk Factors to Consider
A realistic analysis of the market would require a thorough management plan of the price risks, and is important for stakeholders, marketers, processors, exporters, and SMEs. While the future is unknowable, modern techniques and strategies can help predict patterns fairly accurately and can offer a much-needed degree of security in investments. One such risk management instrument is offered by MCX and is called “Castor Futures” and it can increase efficiency and heighten competitiveness.
Investing in agricultural products is an innovative way to protect yourself against inflation and other uncertainties. The uses of castor oil and oil’s derivatives are already pretty vast. Newer applications of castor oil are being explored, primarily in the areas of pharmaceuticals and bio-plastics. This makes sure that the markets for the end products of castor oil and its derivatives remain constantly expanding. This provides a promise of favourable castor seed prices. Supply and demand rates influence the price of every commodity, so, keep a close eye on these trends. Also, keep track of the Castor seed live price before making any commitment.