Castor Com Report, (13!12!2011)

8/3/2019 Castor Com Report, (13!12!2011)

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Commodity report

of

Castor


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INTRODUCTION

Castor plant is a tropical plant that belongs to the

Euphorbiaceae family and is grown for its non-edible oilseed . It is

commercially very important to the world. The castor seed oil cake

is very useful manure to other crops. The oil obtained from the

seeds of this plant is a very useful raw material in many industries

like soap, surface coatings, cosmetics, pharmaceuticals, perfumes,

greases and lubricants etc. Also the oil is used in a large number of

medicines. That is why the seeds and oil of this plant make very

important and valuable commodities that are traded in the market.

This crop needs a tropical type of climate to develop. Thats why the

castor is largely found in the countries lying in the tropical belt of

the world. To derive the oil from the seeds of the plant, the

processes of expression or decoction are used to press the seeds

but the seeds as a whole are also traded in the market. The seeds

generally contain 48 per cent oil content and the rest becomes the

part of oil cake.

Origin and history

According to the available literature, castor (Ricinus comrnunis

L.) is indigenous to Eastern Africa and most probably originated in

Ethopia.

The history of castor plant is not very clear. It is said that this

plant originated in the tropical belt of India and Africa. The Sanskrit

language gave the ancient name of castor i.e. Eranda. It was also

called by various other names in different languages.


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Herodotus, the father of history, stated that the Egyptians

used a type of oil to burn their lamps and for other purposes, which

was made by the seeds of Ricinus in the fourth century BC. He

named it Kiki and till now castor is cultivated in Greece by the samename. Theophrastus and Dioscorides, who stated that the oil of the

plant is not worth eating but is very good if applied externally as a

medicine, gave the detailed description of the plant at around first

century. They also stated the process of extracting oil from the

seeds of the plant. This plant was cultivated till fifteenth century but

due to the negative impacts that it has, it slowly started becoming

unpopular and by the eighteenth century, its production practically

ceased in Europe and the countries started fulfilling their

requirements by importing the oil from Jamaica. This is the period in

which its name changed to castor.

The dark side of this plant oil was observed in the fascist Italy

when under the leadership of Mussolini, castor oil was used to give

punishments to the people who opposed the established fascistgovernment. They were forced to consume this oil that in turn lead

them to death.

Botanical Description

Castor belongs to the genus Ricinus, its a member of the

Euphorbiaccae which consists a vast number ofplants mostly native

to the tropics. The genius; Ricinus is considered to be monotypicand R. cumunis as the only species which includes many

polymorphic types. The cultivated types are dwarf annuals

The stem is erect, circular in section, partially, hollow, smooth

with good branching. The stem is marked by a number of well-
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defined nodes, from each of which a leaf arises. Leaves are

alternate, large, palliated with 5-11 lobes, acuminate, margins

notched serrate or indented. They are carried on long stout petioles.

The inflorescences are borne terminally on the main and lateralbranches. Flowers are large, in terminal sub-panelled racemes,

monocious, apetalous, the upper portion of the raceme being

occupied by the female flowers and the lower by the male flowers.

The fruit is a roundish glaucous capsule, with three projecting sides

covered with tough spines or smooth, three-loculed and three-

seeded. Seeds are albuminous, anatropous, broad, oval,

compressed with a marked carnnele and longitudinal raphe. The

testa is thin, brittle, varying in colour and mottling. Below the testa

is the thin tegmen, covering the whitish oily endospeim containing

the embryo.

Cultivation Pattern

Castor is basically a tropical crop and it can survive in arid

conditions. It is an annual crop and is grown by sowing the seeds

in a hot weather. Castor can survive on various types of soils but

it requires an appropriate and consistent rainfall.

In India, it is grown as a kharif crop and is planted generally

during the months of July and August. The crop has a duration

period of 4 to 5 months and is generally harvested in the months

of December and January. However the sowing and harvesting

periods within the country differ according to the different regions

where the crop is grown. Also, the region only decides that

whether the crop is to be grown as a sole crop or a mixed crop. It

starts to come to the market from October and comes till April.


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Table 1: Important varieties of castor in Gujarat

Sr.No.

Name ofvariety

Year ofrelease

Arearecommended for

cultivationYieldkg/ha

Remarks

a Varieties

1 GAUC 1 1973Rain fed areas of

Gujarat1250 High yield

2 GC 3 2006Irrigated areas of

Gujarat2340

Wilt

resistantb Hybrids

3 GCH 3 1965 Gujarat 1543 High yield4 GAUCH 1 1973 Gujarat, Rajasthan 1942 High yield

5 GCH 2 1985 Gujarat 1747Root rot

tolerant

6 GCH 6 2000

Irrigated areas of

Gujarat, Rajasthan

and M.P.

2349Root rot

resistant

Economic Importance

It is generally grown for, oil-yielding seeds. The oil content ofthe seeds varies from 35-58 per cent in different varieties, the

average being about 47 per cent. Castor-oil is being used widely

for various purposes. It is used as a lubricant in high-speed

engines and aeroplanes, in the manufacture of soaps, transparent

paper, printing-inks, varnishes, linoleum and plasticizers. It is also

used for medicinal and lighting purposes. The cake is used as

manure and plant stalks as fuel or as thatching material or for

preparing paper-pulp. In the silk-producing areas, leaves are fed

to the silkworms.
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Global Scenario

Worlds average total production of Castor seed figures around

12.5 lakh tonnes and is cultivated in more than 30 countries of the

world. India is the worlds largest producer of castor and its

derivatives contributing to almost 65 per cent share. Likewise India

is also the leading producer of castor seed oil, which has its annual

world production hovering around 5.5 lakh tonnes. Due to its end

number of uses in various industries, castor oil has a high level of

demand in the world that is still constantly rising at 3 to 5 per cent

per annum. The major consumer countries of castor oil with their

annual consumption figures are

European Union (1,10,000 MT)

India (1,00,000 MT)

China (80,000 MT)

Brazil (40,000 MT)

USA (40,000 MT)

Japan (20,000 MT)

Thailand (15,000 MT)

Others (10,000 MT)

The world production of this crop is concentrated in the hands

of few countries and that is why there are just a few exporters of

castor oil fulfilling a large level of demand of the world. The major

exporters of castor oil are the leading producing countries of it

namely India, China and Brazil from which only India has been

successfully meeting the domestic and the world requirements. The

country holds a share of 70 per cent in the total exports. The other

two countries have experienced an increase in their domestic


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demand and hence are not capable of exporting a high quantity of

oil. The leading countries in the list of imports of castor oil with their

importing figures are:

European Union (1,10,000 MT)

USA (40,000 MT)

Japan (20,000 MT)

Thailand (150,00 MT)

Others (10,000 MT)

This list shows that the consumption of major importing countries is

wholly dependent on their imports. The trade of castor oil in theworld is estimated at about 2.5 lakh tons.

Castor Producing Countries

As already mentioned, Castor is produced in about 30

countries lying in the tropical belt of the world. The production of

this crop is concentrated in the hands of a fewer countries and that

is why the world production of castor and its derivatives is highly

fluctuating. Any change in the trend of the production of any of

those countries leads to change in the level of world production. The

world production of castor seed hovers around at an average of 12.5

lakh tons and of castor oil is 5.5 lakh tons. The major producer

countries of castor are

India China

Brazil

Paraguay

Ethiopia


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Philippines

Russia

Thailand

The top most country in the list is India with around 65 per

cent of the share in production followed by China with 23 per cent

and Brazil with 7 per cent of share. The world production levels

observed a sharp rise in the year 2001 which took the level to 17.5

lakh tons but it again fell down due to crop failure. Since few years,

the countries China and Brazil are having an increase in their

domestic consumption demand and hence are consuming a greater

share of their production and exporting lesser leaving India to be the

dominant player in the international market.

Table 2: World Production of Castor seeds

Country HarvestSeason

Production (000/T) Yield (T/ha) Harvest Area(000/T)

2010-11 (F)

2009-10

2008-09

2010-11

(F)

2009-10

2008-09

2010-11 (F)

2009-10

200809

Brazil Jun-Sept 101 93 123 0.64 0.59 0.76 158 157 163

China PR Sept-Jan 190 170 190 0.90 0.85 0.86 210 200 220

India Nov-Mar 1150 970 980 1.26 1.18 1.13 910 820 870

OtherCountries

119 114 117 0.63 0.62 0.63 189 185 186

World 1560 1347 1410 1.06 0.99 0.98 1467 1362 1439

Source: - ISTA Mlelke, Germany, Dec 2010 Monthly report, internet:

www.oilworld.de F = Forecast
http://www.oilworld.de/http://www.oilworld.de/


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Figure 1: Per cent share of castor seed production by

major producing countries Production

Figure 2: Per cent share of castor oil consumption by

major consuming countries Production


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Global castor seed production is almost stagnant around 10-

14 lakh tonnes in the past 7-8 years.

Demand growing at 3-5% per annum.

The present world trade about 2.0 2.50 lakh tons per

annum.

India dominates the castor oil exports market, china and

Brazil large domestic demand for castor oil.

Development of new applications and substitutes of castor

oil derivatives better than petrochemical products.

Indian Scenario

India being the largest producer of the castor contributes to

around 65 per cent of the worlds total production. India produces

around 8 lakh tons of castor seed and around 3 lakh tons of castoroil. The states in the country that are the major producers of castor

are

Gujarat Orissa

Andhra Pradesh Tamil Nadu


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Rajasthan Maharashtra

Karnataka

The per cent shares of castor seed production my major

producing states in India in 2010-11 are presented in Figure 3. The

figure indicates that Gujarat is the major state in castor production

with share of 71 per cent followed by Rajasthan and Andhra Pradesh

Figure 3: Per cent share of castor seed production my major

producing states in India (Year: 2010-11)

Total area under Castor crop in India for the year 2010-11 is

8.59 lakh hectares. It has increased by 14 per cent as

compared to previous year.

Estimated total production of Castor Seeds in India for the year

2010-11 is 11.90 lakh tonnes. It has increased by 22 per cent

as compared to previous year.


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Average yield for the year 2010-11 is 1385 kg/hectare as

against 1297 kg/hectare during the year 2009-10. It has

increased by 7 per cent as compared to previous year.

The diagrammatic presentation of crop development based onmonsoon progress in growing regions is given in Figure 4.

Figure 4: Crop development based on monsoon progress

in growing regions

Cropping season

In India, Castor planting season is during July or August and

harvested around December or January. The seed pods are dried,

de-podded and brought to the market yards during December or

January for trading.

Pre harvest operations

1. Emulsion methods2. Pressure extraction methods3. Solvent extraction methods


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Post-harvest operations

1. Cleaning2. Grading3. Separation4. Drying5. Dehydration6. Sun drying7. Milling

Table 3: Statewise Area, Yield and Production of Castor

Seeds in India (2010-11)

District Estimated AreaUnder Crop* (000ha.)

Estimated Production*

(000 tonnes)

Estimated yield *(Kg/ha.)

2009-10

2010-11

%Chang

e

2009-10

2010-11

%Change

2009-10

2010-11

%Change

Gujarat438 483 10% 735 860 17%

1683

1781 6%

Rajastha

n

118 126 7% 126 161 27%106

5

1274 20%

AndhraPradesh

148 198 34% 85 138 62% 575 698 21%

OtherStates

50 52 4% 30 32 7% 600 615 2%

Total754 859 14% 978 1190 22%

1297

1385 7%

* Nielsen India estimate # Secondary source

Table 4: Districtwise Area, Yield and Production of Castor

Seeds in Gujarat (2010-11)

District Estimated Area UnderCrop* (000 ha.)

Estimated Production *(000 tonnes)



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2009-

10

2010-

11

%

Chang

e

2009-

10

2010-

11

%

Chang

e

2009-

10

2010-

11

%

Chang

e

Ahmedabad 14.26 13.86 -3% 24.6 22.44 -9% 1725 1619 -6%

Banaskantha 97.93 105.46 8% 178.24 201.43 13% 1820 1910 5%

Gandhinagar 29.24 31.77 9% 55.25 64.37 16% 1890 2026 7%

Jamnagar 10.36 9.35 -10% 17.77 16.66 -6% 1716 1782 4%

Kutchh 52.21 63.64 22% 61.19 86.36 41% 1172 1357 16%

Kheda 10.83 12.67 17% 17.04 21.67 27% 1574 1710 9%

Mehsana 52.09 59.33 14% 98.22 113.79 16% 1886 1918 2%

Panchmahal 1.95 2.46 26% 2.76 3.54 28% 1414 1441 2%

Patan 41.22 46.54 13% 72.77 84.75 16% 1765 1821 3%

Rajkot 15.20 13.12 -14% 23.59 21.08 -11% 1552 1607 4%

Sabarkantha 54.33 60.81 12% 102.35 119.19 16% 1884 1960 4%

Surendranagar 34.87 38.56 11% 43.07 59.19 37% 1235 1535 24%

Vadodara 11.42 12.71 11% 20.02 23.31 16% 1754 1834 5%

Others 11.48 12.65 10% 19.29 22.54 17% 1683 1781 6%

Total 437.37 482.93 10% 736.16 860.32 17% 1683 1781 6%

Gujarat:

The Districtwise Area, Yield and Production of Castor Seeds

in Gujarat in 2010-11 is presented in Table 4 and graphical

presentation is presented in Figure 5.

Total area under Castor crop in Gujarat for the year 2010-11

is 4.83 lakh hectares.


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The area has increased by 10% as compared to previous

year.

Area under Castor crop has increased in all the major castor

growing districts except Ahmedabad, Jamnagar and Rajkot.

Estimated total production of Castor Seeds in Gujarat for the

year 2010-11 is 8.60 lakh tonnes, it has increased by 17% as

compared to previous year.

Figure 5: District-wise Production of Castor Seeds (Guj)

Growth is mainly in the districts such as Kachchh (41%),Surendranagar (37%) and all other districts exceptAhmadabad, Rajkot and Jamnagar.


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Average yield for the year 2010-11 is 1781 kg/hectare asagainst 1683 kg/hectare during the year 2009-10.

Table 5: Districtwise Area, Yield and Production of CastorSeeds in Rajasthan (2010-11)

District Estimated AreaUnder Crop* (000

ha.)

EstimatedProduction * (000

tonnes)


2009-10

2010-11

%Change

2009-10

2010-11

%Change

2009-10

2010-11

%Chan

Barmer 5.98 6.60 10% 6.6 8.33 26% 1104 1262 14%

Jalore 48.85 52.99 8% 58.13 70.37 21% 1190 1328 12%

Jodhpur 15.94 16.17 1% 17.67 20.86 18% 1108 1290 16%

Pali 3.92 3.72 -5% 4.12 4.35 6% 1052 1170 11%

Sirohi 26.94 28.79 7% 26.48 33.97 28% 983 1180 20%

Others 16.83 18.01 7% 13.14 22.94 74% 781 1274 --

Total 118.4 126.28 7% 126.1 160.82 27% 1065 1274 20%

Rajasthan


in Rajasthan in 2010-11 is presented in Table 5 and graphical

presentation is presented in Figure 6.

Total area under Castor crop in Rajasthan for the year 2010-

11 is 1.26 lakh hectares.

The area has increased by 7% as compared to previous

year.

This year, area under Castor crop has mainly increased in

Barmer (10%) and other major district is Jalore (8%).


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Estimated total production of Castor Seeds in Rajasthan for

the year 2010-11 is1.61 lakh tonnes. It has increased by

27% as compared to previous year.

Production in Sirohi, Barmer and Jalore increased by 28%,

26% and 21% respectively as compared to previous year.

Production in Rajasthan has increased mainly due to

increase in yield.

Average yield for the year 2010-11 is 1274 kg/hectare,

which is 20% higher than previous year.

Yield has increased in all the districts of Rajasthan due to

favourable rainfall and suitable whether condition.

Figure 6: District-wise Production of Castor Seeds in

Rajasthan


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Andhra Pradesh


in Andhra Pradesh in 2010-11 is presented in Table 6 and

graphical presentation is presented in Figure 7.

Total area under Castor crop in Andhra Pradesh for the

year 2010-11 is 1.98 lakh hectares. It has increased by

34% as compared to previous year.

Area under Castor crop has increased in all other districts

except Prakasam and Rangareddy. Major growth is in

Kurnool district.


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Estimated total production of Castor Seeds in Andhra

Pradesh for the year 2010-11 is 1.38 lakh tonnes. It has

increased by 62% as compared to previous year due to

decrease in area and yield.Table 6: Districtwise Area, Yield and Production of Castor

Seeds in Andhra Pradesh (2010-11)

District Estimated AreaUnder Crop* (000

ha.)

Estimated Production* (000 tonnes)


2009-10

2010-11

%Chang

e

2009-10

2010-11

%Change

2009-10

2010-11

%Change

Kumool 24.18

56.30 133 15.28 42.28 177 632 751 19

Mahbubnagar

79.25

90.25 14 46.92 66.15 41 592 733 24

Nalgonda18.3

620.70 13 8.04 9.27 15 438 448 2

Prakasam 7.32 7.09 -3 3.91 4.12 5 534 581 9Rangaredd

y4.24 4.20 -1 2.53 2.87 14 594 681 15

Othersdistrict

14.84

19.46 34 8.53 13.59 59 575 698 21

Total148.19

198.00 34 85.21 138.28 62 575 698 21

Source: Nielsen India estimates

Average yield for the year 2010-11 is 698 kg/hectare,

which is 21% higher than the previous year. Yield has

been increase due to adequate rainfall and good climatic

conditions during the progress of the crop.


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Figure 7: District-wise Production of Castor Seeds in Andhra

Pradesh

Cost of Cultivation

The details of cost of cultivation and yield of castor arepresented in Table 11. It can be revealed from the table that the

average total cost (Cost C2) of castor per hectare was Rs.27727. The

expenditure share of operating cost in the total cost was 60.33 per

cent. Among the different items of expenditure, the human labour

ranked first with 19.47 per cent of the total cost, followed by

irrigation (18.77 %), miscellaneous costs (7.01 %), chemical

fertilizers (5.58 %), bullock labour (4.91 %), manure (4.81 %),seeds (4.43 %), plant protection measures (1.44 %), etc. The

table further showed that the average


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Table 11 Details of cost of cultivation of Castor crop per hectare in

Gujarat,2009-10

Sr.

No.

Items Physical

unit

Value

Rs.

% to

Cost

C21 Human labour:

A: Family (man days) 38.50 3313 11.95

B: Hired (man days) 25..25 2084 7.522 Bullock labour (pair days) 3.75 1363 4.91

3 Seeds (kgs.) 7.27 1228 4.434 Manures (carts) 5.75 1334 4.815 Chemical fertilizers (kgs) N 79.04

1546 5.58P 43.89K 0

6 Irrigation 5205 18.77

7 Insecticides/pesticides 399 1.448 Miscellaneous costs 1944 7.019 Depreciation cost 245 0.88

10 Interest on working capital 1381 4.9811 Rental value of owned land 4830 17.4

212 Interest on owned fixed capital 334 1.2113 Management cost 2521 9.0914 Cost A 16729 60.3

315 Cost B 21893 78.9

616 Cost C1 25206 90.9

117 Cost C2 27727 100.

0018 Yield: A: Main product (qn/ha) 18.55

B: By-product (qn/ha) 19.73

19 A: Farm harvest price of main product

(Rs/qn)

2736.7

1


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B: Income from by-product (Rs/ha) 595

20 Gross income: main product + by-product (Rs/ha) 51361

Summary results

Sr.

No

Costs Returns/ha over

Costs (Rs.)

Costs/qn

(Rs.)

Input-output

ratio over costs

1 Cost A 34632 870 1:3.072 Cost B 29468 1148 1:2.353 Cost C1 26155 1327 1:2.04

4 Cost C2 23634 1463 1:1.85

yield of castor was 18.55 quintals per hectare. The average gross

returns was Rs.51361/- per hectare. The input-output ratio worked

out was 1:1.85.It indicates that the cultivation of castor was found

profitable during the period of study.

Indian Castor Market

Oils and oilseeds have played an important role in the Indian

economy for a long time. India produces a large variety of

oilseeds including rapeseed, groundnut, sunflower etc., which

earn the country huge share of foreign exchange. Castor seed is a

non-edible oilseed that is produced for its very useful oil.

India is the largest producer of castor seed and oil. It

contributes about 8 lakh tons of castor seed with an approximate

of 65 per cent share and 3 lakh tons of castor oil with an

approximate of 51 per cent share in the world total production.

Gujarat is Indias leading castor producing state constituting to

around 86 per cent of the countrys total produce. India nearly

consumes one-fourth of its total production and exports the rest

but it still is the second largest consumer in the world. The major

sources of demand of castor oil are the various industries like

soap, lubricant and paint industries and the demand of the oil is


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spread all across of country. This crop is grown over 6.25 lakh

hectares of the country.

As it is mentioned before, India exports 75 per cent of its

total production of castor and its derivatives. India exports around

3 lakh tons of castor oil that is worth Rs.700 crores and stands at

the top position in the list of major castor oil exporting countries.

India exports castor oil in two forms namely First Special grade

and Castor Oil Commercial. This figure of exports from India is on

a rising trend and much of the worlds requirements are fulfilled

by India only. The countries that imports castor oil from India are

European Union

USA

Japan

China

Thailand

Though, India is a dominant player in the world market, it is

just a price taker and not a price setter due to its poor

infrastructure but it has the capability to improve on the exports

of the derivatives of castor and overcome this limitation.

Market Influencing Factors

Production and acreage variations

Monsoon and rainfall level

Size of the yield level of other countries

Prices of other competitive oils

Demand of the importing countries and domestic demand


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Seasonal price variations

Hoarding and black-marketing

Carryover stocks

Development of new uses of the oil

Factors Influencing Prices

1. Consumption and export pattern

2. Estimated output based on the acreage and weather

conditions and pest infestation etc.

3. Leftover stocks from the previous years production after

meeting the demand

4. Government policies and intervention

5. Shifting cropping patterns in producing countries

Characteristics of Castor seeds and Oil Market

Uncertain supply - The world castor seed production has

fluctuated between 1.2 and 1.8 million tonnes since 1997 to2001. India's production ranged between 0.8 and 1.1 million

tonnes during the same period.

Recent developments of artificial substitutes of castor oil in

the world market has subjected the demand to fluctuation

Long storing period - It is a common practice for the castor

seed growers and crushers to hoard the commodity before

selling in expectation for better prices.

Well-developed and organized spot market in India

Major Trading Centres in India


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The major trading centres of castor and its derivatives in

India are:

Rajkot (Gujarat) Disa (Gujarat)

Ahmedabad (Gujarat) Kadi (Gujarat) Gondal (Gujarat) Jedcherla (Andhra Pradesh) Patan (Gujarat) Yemignoor (Andhra Pradesh) Dhanera (Gujarat)

Marketing Channels for Castor

Marketing channels are routes through which agricultural

produce move from producer to consumer.

The most important marketing channels for castor in India

are:

1. Producer -> Village trader -> Oil retailer -> Consumer

2. Producer -> Oilseed wholesaler -> Processor -> Oil

wholesaler -> Oil retailer -> Oil consumer.

3. Producer -> Processer or Oil wholesaler -> Oil retailer

-> Exporter.

Seasonal trend in average castor price

The seasonal trend of castor price in Patan APMC from period

2001 to 2010 is given in Figure 8. The highest price of Rs. 2036.98

per quintal was observed in November. The lowest price wasobserved in January i.e. Rs. 1743.90 per quintal.

The seasonal trend of castor price in Dhanera APMC from

period 2000 to 2009 is given in Figure 9.Many ups and downs were


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observed in seasonal price of castor in Dhanera APMC. The highest

price of Rs. 1773.37 per quintal was observed in August. The lowest

price was observed in December i.e. Rs. 1635.57 per quintal.

Figure 8: Seasonal trend in average castor price in Patan

APMC

(Period: 2001 to2010)

Figure 9: Seasonal trend in average castor price in Dhanera

APMC

(Period: 2000 to2009)


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Market Integration

In order to check the stationarity of price series of castor the

Augmented Dickey Fuller based unit root test procedure was done.

The result is given in Table 7. From the table it could be inferred

that Augmented Dickey Fuller test values are above the critical

value (i.e. 1 %) given by MacKinnon statistical tables at levels

implying that the series are non-stationary at their levels indicating

the existence of unit root. After taking first difference, all the series

become stationary which can be observed from the calculated

values for both the markets are less than the critical value (1 %) and

are free from unit root.

Table 7: ADF test results of castor price

Market Level First

difference

Critical value (1%)

Patan -1.372 -7.476 -3.495


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Dhanera -1.443 -7.378

*MacKinnon critical values for rejection of hypothesis

Johansens Multiple Cointegration Analysis

Based on Johansen multiple cointegration procedure the

integration between the Patan and Dhanera markets was analysed.

The result is presented in Table 8. The result indicated the presence

of cointegration at 5 per cent level of significance. Hence both the

markets have long run equilibrium.

Table 8: Results of Multiple Cointegration Analysis

Trace

Statistics

1 % critical value 5 % critical

value

No. of CE

37.53 19.93 15.49 None*

Granger Causality Test

In order to know the direction of causation between the

markets Granger causality test was carried out. The results are

presented in Table 9. The results indicated that Dhanera market

price influenced the Patan market price and there existed

unidirectional causality from Dhanera market price to Patan market

price. Patan market price has not influenced Dhanera market price.


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Table 9: Pairwise Granger Causality Test results

Null HypothesisObs

.

F-

statistics

Probabilit

y

Dhanera does not Granger CausePatan

102

157.213** 4.E-31

Patan does not Granger Cause

Dhanera1.60237 0.2067

(** indicates significant at 1 per cent level)

Distribution of castor seed

The distribution of castor seed from assembling markets tocrushing centres is effected mainly by whole sale

merchants, commission agents, millers and exporters.

Owners of ghanis and small crushing establishments

generally purchase their seed requirements locally from

whole sale merchants.

Large oil-mills purchase through their agents at assembling

centres.

Millers usually purchase their requirements of castor-seed

on the basis of samples and in the case of local purchases

often after inspecting the produce. Agencies Engaged in the

Marketing of Castor:

The proportion of marketable surplus taken by producers to

the market varies from 10 to 75 per cent.


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It is estimated that in Bihar, only 10 per cent is taken to the

market by the producers while in Uttar Pradesh, 50 per cent

is taken.

In Andhra Pradesh, 25 to 75 per cent produce is taken by

producers directly to the market.

For the whole of India, it may be said that about 50 per cent

is taken to the market by producers and the remaining 50

per cent reaches the market through various types of

middlemen.

In some States, the prices offered by middlemen in the

villages are better than the ones prevailing in the large

markets.

Export of Castor Oil

India currently exports castor oil and derivatives worth

about 3000 crore Rs. ($ 650 million) per annum, while the

country holds around 90 per cent share in the total castor

oil and derivatives exports in the world.

Global consumption of castor oil is expected to rise

marginally in the range of 630,000-640,000 tonnes in the

year 2010-11.

The growth of consumption is moderate in the US and

falling in Japan and South Korea.


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The industry body has estimated India's castor oil export

this year around 3.97 lakh tons. Current rate of castor oil,

CIF Rotterdam is USD 2700.

About 23000 MT are to be shipped and shippers daily needsupply of raw material of up to 60,000- 65,000 bags.

The prices, which had touched a peak of $2800 per tonne,

are expected to come down to $2000-2200 per tonne in

coming months.

Table 10: Export of castor oil by India (Excluding

Derivatives)

YearApril-March

QuantityM.T.

ValueRs. Crore

2000-01 227.033 806.072001-02 204.877 556.222002-03 163.862 520.852003-04 161.619 603.272004-05 208.176 788.562005-06 182.159 627.432006-07 186.610 653.05

2007-08 176.177 757.292008-09* 308.625 1821.572009-10* 345.333 1780.312010-11*

(up to October)

259.970 1706.90

Source: - SEA Data Bank* Including bulk & Containers

The export of Castor oil by major exporting countries is

presented in Table 11. It is clearly visible from the table that India is

the major exporter of castor oil followed by U.S.A, European Union

and Brazil.

Table 11: Export of Castor oil by major exporting countries


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(Oct Sept) (Qty. in 000tonnes)

Source: - ISTA Mlelke, Germany, Dec 2010 Monthly report, internet:

WWW.oilworld.de

The diagrammatic presentation of export of castor oil by India

in quantity and value terms is shown in Figure 10. It can be seen

that India exported highest castor oil in the year 2004-05 in quantity

as well as value term.

Figure 10: Export of castor oil by India

(Quantity: in Lakh MT & Value: in Rs. Cr.)

Country 09-10 08-09 07-08 06-07 05-06 04-05 03-04India 395.5 271.2 350.9 299.6 246.5 272.5 216.4

EU 27 2.9 1.9 1.7 1.7 1.3 1.7 2.2U.S.A. 7.6 7.1 6.1 3.3 4.0 2.6 3.0Brazil 0.9 0.7 0.2 2.6 4.1 10.2 0.7Other

Countrie

s

20.8 20.1 23.6 20.1 24.1 27.0 26.9

World 428.1 301.0 382.5 327.5 282.0 314.0 251.2
http://www.oilworld.de/http://www.oilworld.de/


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CONCLUSION

India is the largest producer of castor seed and oil. It

contributes about 8 lakh tons of castor seed with an approximate

of 65 per cent share and 3 lakh tons of castor oil with an

approximate of 50 per cent share in the world total production.

Gujarat is Indias leading castor producing state constituting to

around 86 per cent of the countrys total produce. India nearly

consumes one-fourth of its total production and exports the rest

but it still is the second largest consumer in the world.

India exports about three-fourth per cent of its total

production of castor and its derivatives. India stands at the top

position in the list of major castor oil exporting countries. India

exports castor oil in two forms namely First Special grade and

Castor Oil Commercial. This figure of exports from India is on a

rising trend and much of the worlds requirements are fulfilled by

India only. Though, India is a dominant player in the worldmarket, it is just a price taker and not a price setter due to its

poor infrastructure but it has the capability to improve on the

exports of the derivatives of castor and overcome this limitation.

REFERENCES

www.ikisan.com/links/ap_castorHistory.shtml

Report on Castor, National Multi-Commodity Exchange of India

Limited

Castor Seed Seasonal Outlook, KARVY Comtrade Ltd.
http://www.ikisan.com/links/ap_castorHistory.shtmlhttp://www.ikisan.com/links/ap_castorHistory.shtml

Castor Com Report, (13!12!2011)

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