As the global castor oil market has remained stagnant for the past couple of years, castor seed growers and traders in castor seeds, castor oil and other derivatives from all over the country and even abroad, met in Ahmedabad on Sunday to chalk out measures to reverse this trend.
India is the world leader in production of castor seed and meets 90 per cent of the total requirement of castor oil.
Exports of castor seeds and oil earn foreign exchange worth Rs seven billion for the country every year.
Over 300 delegates from all over the country and abroad participated in the day-long international seminar on castor seed, castor oil and its value-added products.
D P Khandelia, president of the Solvent Extractors’ Association of India (SEA) said castor oil has an immense growth potential, but the market is unable to grow quickly because of the highly volatile prices and inadequate research and development in this field.
“As a dominant producer and exporter of castor oil, India now has to play a lead role in rejuvenating the future of castor business,” Khandelia said.
A K Mitra, general manager (exports), Hindustan Lever, said farming, processing, marketing and support facilities form the value chain.
While contract farming should be adopted to increase productivity, there is a scope of increasing exports of derivatives by at least 50 per cent.
“Today, while India crushes almost all the seed produced, it converts very little oil into derivatives. Only 12 per cent of castor exports are in the form of derivatives. We need to aim at increasing this by at least 50 per cent in the next five to seven years,” Mitra said.
Mitra emphasised the need for an efficient, transparent and well-regulated futures market.
“Global customers, shippers, millers and farmers should know the demand and crop prospects,” he said.
Vithaldas Udeshi, chairman of Jayant Agro-Organics, Mumbai, said considering the present situation, it appears that castor oil prices will not drop to lower levels and to an extent, will follow price tendencies of other vegetable oils.
The year 2003 witnessed a drop in prices from Rs 44,000 per tonne in January to Rs 41,500 in March. The prices then recovered to touch the year’s high at Rs 48,700 in April.
It, however, fell sharply by 36 per cent to touch the bottom at Rs 31,000 per tonne in September.
In India, although the area under cultivation of castor marginally increased from 0.62 million hectares in 2001-02 to 0.63 million hectares in 2002-03, there has been a drop in both production as well as yield per hectare over the same period.
Production fell from 0.59 million tonne to 0.58 million tonne and the yield per hectare dropped from 0.96 tonnes per hectare to 0.93 tonnes per hectare.
A K Joti, chairman of the Kandla Port Trust which handles close to 100 per cent of India’s castor seed, oil and derivatives exports, said while 1.90 lakh tonnes of castor was exported from Kandla Port in 1998-99, the export figure dropped to Rs 1.59 lakh tonne in 2002-03.
“But that was mainly because of erratic rainfall which affected the crop pattern in Gujarat and other castor producing areas,” Joti said.
With access to latest technological inputs and innovations, it is possible for castor growers to create the right conditions and inputs to improve crop yields as well as quality, the speakers at the meet said.
Source: Business Standard Ltd. vom 2004-02-09.