Castor prices are trading at a strong pace in the country’s agricultural markets these days. For the first time in the past three years, castor prices have reached such high levels. Castor prices on the National Consumer Dispute Reduction Index (NCDEX) have surpassed ₹7,000 per quintal, the highest level since February 2023. In February 2023, castor prices reached ₹7,152, and current prices are showing a strong rebound in this range.
Castor prices have seen a rise of approximately 7 percent over the past two months. In November alone, the rise of approximately 3 percent has been observed, which appears to be strengthening due to steadily increasing demand and limited production.
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Which states produce the most castor?
Gujarat is the largest producer of castor in India, accounting for the largest share of the country’s total production. This is followed by Rajasthan, Odisha, Telangana, and Andhra Pradesh. Castor remains an important cash crop for farmers in these states.
Fluctuations in Castor Seed Production
Castor seed production has fluctuated significantly over the past few years. Production peaked at 1.842 million tons in 2019-20. Subsequently, production declined to 1.647 million tons and 1.619 million tons in 2020-21 and 2021-22, respectively. The situation improved in 2022-23, reaching 1.98 million tons. In 2023-24, it reached 1.959 million tons, but production is projected to decline again to 1.73 million tons in 2024-25.
This decline in production has limited supply in the market, supporting prices.
Spiking Soybean Prices in the International Market
Global soybean prices are also rising. Soybean prices in the international market have reached a nearly one-and-a-half-year high. It has been rising for the second consecutive month. So far, November has seen a gain of about 2.50 percent, and October has seen a gain of about 10 percent.
This increase has been further strengthened by falling global stocks, rising demand, and fears of a decline in global production.
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Soybean prices rise on USDA estimates
According to the USDA report, global soybean production is expected to be 421.75 million tons, which is lower than normal. Furthermore, closing stocks are estimated to be 121.99 million tons, which has raised concerns about supply in the market.
Demand for soybean meal has also increased rapidly in Asia. Rising consumption of soybean meal as animal feed has provided additional support to prices. Rising demand and limited supply have combined to push prices to new highs.