Castor is a commercially very important plant in the world. With the knowledge of how valuable is the oil got from it, castor must as well be recognized that the castor seed oil cake is a very helpful compost for other crops. This crop grows and blooms only under a tropical climate. That is why the castor is mostly found in the countries which fall in the humid belt of the world. To extract the oil from the seeds, the procedures of extraction or decoction are utilized to compress the seeds but the seeds, on the whole, are as well dealt with in the markets. The seeds normally comprise 48% oil content and the remaining turns into the part of oil cake.
The oil got from the seeds of the castor plant is a very valuable raw material in a lot of industries for instance lubricants, perfumes, cosmetics, surface coatings, pharmaceuticals, greases and soap etc. The oil is as well used in a great number of medicines. This the reason as to why the seeds, as well as oil of this plant, are very significant and important commodities that are traded in the market.
Market determining components
• Production as well as land differences
• Monsoon plus rainfall intensity
• Other countries’ yield level size
• Other competitive oils prices
• Domestic demand as well as the demand of the importing countries
• Cyclic price differences
• Hoarding in addition to black-marketing
• Development of new applications of the castor seed oil
Factors determining Castor seed prices
• Use and pattern of export
• Predictable production depending on the available land and climate conditions as well as pest plague etc
• Remaining stocks from the preceding year’s production after the demand of that year was met
• Government strategies and interference
• Direct procurement by the government authorities and store in warehouses
• Changing cropping patterns in producing countries
• Prices of other competitive oils for instance hydrogenated oil, sulfonated oil, sulphated and dehydrated oil etc.
• Weather conditions, insects, diseases plus other menace factors linked with agricultural crops.
Trading in castor seed
The actuality of the market demands competent price risk managing method that is significant for stakeholders, like producer, processors, exporters, marketers, as well as SMEs. When the future is not known, contemporary techniques and schemes, including market dependant risk management fiscal mechanisms like ‘Castor Futures’ provided on the MCX platform can perk up efficiencies and combine competitiveness via price risk managing.
How can Gill Broking help you?
Gill Broking blends its know-how in commodity risk management, and economic research to allow its clients to expansively manage contact to commodity price instability.