MUMBAI, 14 July 2025: To be successful in business, a businessman should be as transparent as a child in financial transactions, as firm as a young man in decision-making and as experienced as an adult.
Now, since technology and online platforms are also connected to traditional market trade in agricultural commodities, the combination of experience and quick decision-making power has become especially necessary.
Talking about castor seeds, in the past, when there was no chance of any crop being successful, farmers used to plant castor seeds. At that time, farmers had to take the price offered by the trader. Today, the situation has changed.
From castor oil exporters to Cash & Carry investors also invest in the castor trade. Due to which farmers also get higher returns. Perhaps this is the reason why now the castor seed market often sees high volatility up to 10 percent in a month.
If we look at the statistics, the NCDEX futures price of castor seeds on June 3, 2025 was at the level of INR 6400 per quintal, which crossed the level of INR 6925 on July 3, 2025. In June, amid a rising market, the castor seed prices rose due to a decline in arrivals from farmers and an increase in millers' demand.
Due to this difference, investors got an opportunity to earn interest of 12 to 14 percent by taking advantage between the spot and futures prices. However, in the beginning of July, prices fell due to tariff confusion and profit booking by investors.
As a result, prices went down at the level of INR 6750 on July 10. These kinds of uncertainty often cause losses to physical market traders, exporters and millers. That is why hedging and futures are needed. Generally, farmers of Gujarat and Rajasthan plant castor after sowing other kharif crops. Hence, the figures of castor cultivation are coming late.
According to the currently available data, castor has been planted in 5683 hectares of area in the country. It was recorded in 2152 hectares in this period last year. If we look at the average of the last three years, castor is planted in 694900 hectares. If the current prices continue, then this time also the figure of planting is estimated to reach approximately seven lakh hectares.
According to industry sources, India has exported 363893 tonnes of castor oil from January-25 to June-25. This is less than the 406360 tonnes exported during the same period in 2024.
However, in the calendar year-2024, India has exported a total of 701526 tonnes of castor oil, which is the highest annual export in the last decade. We witness highest castor seed arrivals usually in the months of April and May. This time, 444000 tonnes of castor seeds arrived from January-25 to June-25. This is the lowest in the last three years in this period.
Since the futures became available, the parameters of the spot market have also changed. Often, castor seeds purchased from the spot market are deposited in the exchange-approved warehouses.
Currently, there are about 19,000 tonnes of castor seeds in NCCL-certified warehouses. Based on this stock, millers hedge while investors often earn interest by taking advantage of the price difference between the two futures. In June, investors earned an interest of 12 to 14 percent in the calendar spread.
Many investors have earned interest of up to 20 percent per annum by keeping castor seeds in non-NCCL warehouses and paying less rent, market sources say. Due to this strategy of investors, NCDEX futures currently saw an open interest of 50,000 tonnes and an average daily volume of INR 60 crore. However, if the market remains bearish, investors can give delivery.
By Kalpesh Sheth is an commodities expert with years of experience.
