Castor exports set to surge as China, Brazil face poor crops

AHMEDABAD: Poor castor crops in China and Brazil, the other major castor oil exporting countries besides India, could see Gujarat reaping a rich harvest this year.

Traders in Gujarat, which accounts for close to 65% of the country’s total castor exports, are hopeful that castor oil exports would increase significantly in the coming year.

“This year China is expected to import around 70,000-75,000 tonnes of castor oil from India compared to 45,000 tonnes last year,” said Pravin Thakkar, a castor oil trader in Ahmedabad.

China, in fact, has already placed a fresh order of 5,000 tonnes of castor seeds from Gujarat even as the season is set to start. China has been importing castor oil from India due to lower prices, minimum transportation cost and quality products.

It uses castor oil for commercial purposes like making castor oil derivatives and industrial fuel. The poor castor crop had also forced China to use ‘Tung oil’, which was much more costlier.

Rajkot Seeds Oil and Bullion Merchants Association, a major bourse for castor seeds, is already bullish on higher trading margin level. “We are expecting a significant increase in trading too,” said a senior officebearer of the exchange.

Brazil, another major castor exporter after China, has also witnessed a fall in its castor production this year. “Exports of castor seeds from Brazil are expected to fall to as low as 2,000 tonnes compared to 16,000 tonnes,” another trader said. This obviously means more opportunity for Indian castor exporters.

India is the largest producer of castor seed in the world with an estimated share of 60%. It exports close to 3 lakh tonnes of castor oil to countries such as the US, EU, South-East Asian countries and China. Other major importers countries are also keenly watching the monsoons in India to look at the potential production and the effect it would have on prices.