NATIONAL MULTI-COMMODITY

EXCHANGE OF INDIA LIMITED

Report on Castor

4th Floor H. K. House,

B/h Jivabhai Chambers, Ashram Road,
Ahmedabad, Gujarat 380 009 INDIA
Phone: 91-79-4008 6039 Fax: 91-79-4008-6040
Email: contact@nmce.com URL: www.nmce.com
Castor Seed

Table of Contents

Introduction .............................................................................................. 3
Cultivation Pattern .................................................................................... 3
Castor Growing Area & its Production ...................................................... 4
State-wise Production ............................................................................... 5
Source: Castor Crop Survey ....................................................................... 5
International Scenario ............................................................................... 7
Trade Scenario .......................................................................................... 9
Castor Uses ............................................................................................. 11
Castor Oil ................................................................................................ 12
Castor Extraction .................................................................................... 13
Prices of Castor seed and oil ................................................................... 14

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Castor Seed

Introduction

Castor (Ricinus communis L.) is cultivated around the world because of the commercial
importance of its oil. India is the world’s largest producer of castor seed and meets most
of the global demand for castor oil. India produces 8 to 8.5 lakh tonnes of castor seed
annually, and accounting for more than 60% of the entire global production.

Because of its unlimited industrial applications, castor oil enjoys tremendous demand
world-wide. The current consumption of Castor Oil and its derivatives in the domestic
market is estimated at about 300,000 tonnes. India is also the biggest exporter of castor
oil and its derivatives at 87% share of the international trade in this commodity.

Castor is an important non-edible oilseed crop and is grown especially in arid and semi
arid region. It is originated in the tropical belt of both India and Africa. It is cultivated in
different countries on commercial scale, of which India, China and Brazil are major
castor growing countries accounting for 90 per cent of the world's production.
Historically, Brazil, China and India have been the key producing countries meeting
global requirements. However, in early 90’s, Brazilian farmers moved away to more
lucrative cash crops, and surge in domestic demand in China made them net importers,
leaving India to meet the global demand.

Cultivation Pattern

Castor crop needs a tropical type of climate to develop. That’s why the castor is largely
found in the countries lying in the tropical belt of the world.

In India, Castor is planting season is during July or August and harvested around
December or January. The seedpods are dried, de-podded and brought to the market
yards during December or January for trading.

Traditionally, castor is a kharif season crop. Sowing of castor with onset of monsoon is
found most beneficial in rained condition. However, sowing can be done up to first
fortnight of August without reduction in yield under irrigated condition.

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Castor Seed

Castor Growing Area & its Production

Indian Castor Seed Area, Production and Yield

Year Area (000 ha) Production (000 MT) Yield (kg / ha)
2001-02 716 652 911
2002-03 583 428 733
2003-04 732 801 1094
2004-05 820 790 963
2005-06 948 970 1023
2006-07 810 800 987
Source: SEA of India

Castor grows under tropical conditions. It loves heat and humidity and does best in
regions where both are ample. India is gifted with an ideal climatic condition for
castor seed.

Castor seed production during the past decade remained around 7 to 8 lakh tonnes.
More than 9 lakh tonnes were produced in 2005-06, which was the highest during the
decade. Prices fell in 2005. Thereafter the area under castor production declined, leading
to drop in production in the following year.

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Castor Seed

Castor Seed Production Trend in India

12.00

9.91
10.00
Production (in lakh tonnes)

9.00 9.28
8.80
8.30 8.40
7.80 7.70 7.97 7.93 7.95
8.00
6.53
6.00
4.28
4.00

2.00

0.00
1995-96

1996-97

1997-98

1998-99

1999-2000

2000-01

2001-02

2002-03

2003-04

2004-05

2005-06

2006-07*

2007-08*
Source: Agricultural Statistics Division ; * Estimates

The total production declined by about 19% during 2006-07 from about 9.9 lakh tonnes
in the previous year. One may note that the area under production also declined by 15%.
The average annual castor seed and castor oil prices declined during 2005.

As per estimates, India produced 9.2 lakh tonnes in 2007-08

State-wise Production

Production( '000 MT)

State
2006-07 2007-08 % Change
Gujarat 494.81 (63%) 651.22 (72%) 32%
Rajasthan 135.24 (17%) 142.88(16%) 6%
Andhra Pradesh 113.57 (15%) 83.13 (9%) -27%
Others 40 (5%) 32.63 (3%) -18%
Total 783.62 909.86 16%
Source: Castor Crop Survey

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Castor Seed

Gujarat is the leading state in castor seeds production in India followed by Rajasthan
and Andhra Pradesh. Gujarat contributed 71% of the total production of castor seed in
India in 2007-08, followed by Rajasthan at 16%, Andhra Pradesh at 9% and other states
sharing 4%.

Statewise Castor Seed Production (in '000 tonnes) in India 2007-08

Andhra
Others
Pradesh
32.63
83.13
4%
9%
Rajasthan
142.88
16%

Gujarat
651.22
71%

Source: Castor Crop Survey

Mehsana and Banaskantha is the largest castor producing districts in Gujarat. In

Gujarat castor cultivation comes from 6 districts of North Gujarat, viz., Mehsana,
Banaskantha, Sabarkantha, Gandhinagar, Patan and Kutch.
District-wise Production Details

Gujarat
District 2006-07 2007-08 % Change
Banaskantha 108.77 165.72 52.36%
Gandhinagar 46.18 52.32 13.30%
Kachchh 94.25 88.29 -6.32%

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Castor Seed

Mahesana 54.21 77.61 43.17%

Patan 33 54.35 64.70%
Rajkot 12.42 18.65 50.16%
Sabarkantha 70.38 92.73 31.76%
Surendranagar 24.62 37.08 50.61%
Jamnagar 17.19 20 16.35%
Others 33.79 44.47 31.61%
Total 494.81 651.22 31.61%

Rajasthan

District 2006-07 2007-08 % Change

Barmer 10.81 6.69 61.58%
Hanumanthgarh 32.03 11.86 170.07%
Jalore 39.53 60.07 -34.19%
Jodhpur 22.46 17.36 29.38%
Pali 2.09 4.98 -58.03%
Sirohi 21.58 33.77 -36.10%
Other 6.74 8.15 -17.30%
Total 135.24 142.88 -5.35%

Andhra Pradesh

District 2006-07 2007-08 % Change

Kurnool 4.07 2.47 64.78%
Mehabubnagar 68.77 48.14 42.85%
Nalgonda 26.38 21.3 23.85%
Rangareddy 4.83 3.56 35.67%
Others 9.52 7.65 24.44%
Total 113.57 83.12 36.63%

International Scenario

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Castor Seed

Castor seed is cultivated in various countries around the world that lie 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
and Brazil.

World Castor Seed Production (000 MT) 2008

Others
Brazil 110
90 9%
7%

China
240
19% India
830
65%

The top most country in the list is India with around 65% of the share in production
followed by China with 23% and Brazil with 7% of share.

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

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Castor Seed

production and exporting lesser leaving India to be the dominant player in the
international market.

Trade Scenario

Castor crop plays an important role in the agricultural economy of the earning
substantial foreign exchange through export of castor beans and oils. India’s exports of
castor oil and derivatives are estimated at over Rs.800 crores p.a. The global castor
derivatives market is highly dependent on India. India’s export of castor oil and
derivatives is 2.6 lakh tonnes in 2007-08.

India is the first country in the world to exploit hybrid vigor on commercial scale in this
crop. Major markets include European Union, USA, Japan and now China and
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.

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Castor Seed

Castor Oil Export Trend from India

250,000

204,877 208,176
186,610
200,000 182,159
Export (in tonnes)

163,862 161,619
139,729
150,000

100,000

50,000

-
2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08*
*upto Dec 2007
Source: SEA

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Castor Seed

Castorseed Oilcake Export Trend from India

300000
253400
250000
202185
201150
Export (in tonnes)

200000

150000

101885
100000 82495 89640
69062

50000

0
2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08*
*upto Dec 2007
Source: SEA

Castor Uses

Castor is a plant that is commercially very important to the world. Castor seed oil cake
is very useful manure to crops. It is a very good fertilizer alternative containing
optimum levels of Nitrogen, Phosphorous and Potassium which is suitable for
cultivation of Paddy, Wheat, Maize and Sugarcane.

To derive the oil, the castor fruits are separated from the plant and allowed to dry for
about 10-15 days. The dried fruit is split open from which castor seeds are obtained.
These seeds are processed prior to extraction of oil. The seeds generally contain up to
48% oil and the rest becomes the part of oil cake.

Though India meets most of the world’s requirement of castor oil we are not capitalizing
it. We still continue to export the oil rather than add value to it. We buy back our own
castor oil as formulated products and derivatives at many times the price of the oil.

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Castor Seed

Castor Oil’s application range is very wide-the uses range from cosmetics, paints,
synthetic resins & varnishes, to the areas of national security involving engineering
plastics, jet engine lubricants and polymers for electronics and telecommunications.

Castor is a versatile, renewable resource having vast and varied applications such as
lubricating grease, surfactants, surface coatings, telecom, engineering plastics, pharma,
rubber chemicals, nylons, etc.

Castor oil and its derivatives find major application in soaps, lubricants, grease,
hydraulic brake fluids and polymers and perfumery products.

The primary use of castor oil is as a basic ingredient in the production of nylon 11, jet
engine lubricants, nylon 6-10, heavy duty automotive greases, coatings and inks,
surfactants, polyurethanes, soaps, polishes, flypapers, lubricants, and many other
chemical derivatives and medicinal, pharmaceutical and cosmetic derivatives.

The seeds and residual cake are highly poisonous and unless processed to remove the
poisons cannot be fed to livestock. In some countries the cake is used as a fertilizer.
Poisons contained in the cake include ricin.

Castor Oil

Castor oil is obtained by pressing the seeds, followed by solvent extraction of the
pressed cake. Castor Oil is one of the world’s most useful and economically important
natural plant oils. India supplies 70% of the world’s requirements of castor oil. This oil
is unique among vegetable oils and uniqueness is derives from the presence of a
hydroxyl fatty acid known as ricinoleic acid (12- hydroxyl-cis-9-octadecenoic acid) which
constitute around 90% of the total fatty acids of the oil. Castor Oil is also distinguished
from other vegetable oils by its high specific gravity, thickness and hydroxyl value.

India is the largest exporter of Castor Oil. A major part of the castor oil produced in this
country is exported and the value addition takes place in the importing countries.

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Castor Seed

The Indian variety of castor seed has an oil content of 48% and 42% can be extracted,
while the cake retains the rest.

Castor oil is used either in its crude form, or in the refined hydrogenated form.
Typically, 65% of it is processed. About 28% is refined, 12% is hydrogenated, 20% is
dehydrated, and the balance 5% is processed to manufacture other derivatives. The
major derivatives of Castor oil used in the industry –hydrogenated castor oil (HCO),
Dehydrated castor oil (DCO), Sebacic acid etc.

The demand for castor oil derivatives is perennial in nature since they are indispensable
to the manufacture of various products. Besides, as castor does not have a synthetic or
any other alternative, it has an assured market.

Domestic demand of Castor Oil has unfortunately not kept pace with growth in castor
seeds output. Developed economies are major user of castor oil.

Castor Extraction

The solvent extracted cake, although rich in protein cannot be used as cattle fodder
because of its toxicity. However, it can be used as a fertilizer.

The protein content of castor seed meal varies from 21-48% depending upon the extent
of decortications. It has an ideal amino acid profile with moderately high Cystine,
mithionine, and isoleucine. But its ant nutritional substances, ricin, ricine and an
allergen restrict its use in poultry feed, even at a very low level of inclusion.

Castor Cake is an excellent fertilizer because of high content of N (6.4%), Phosphoric

Acid (2.55%) and Potash (1%) and moisture retention.

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Castor Seed

There is negative correlation between the contents of ricinine in castor seeds and oil
content (r = -0.76). This content of ricinine in castor seed is determined by agro climatic
conditions.

Prices of Castor seed and oil

Prices of Gujarat castor seed in Mumbai market since 2001 has shown high volatility. Its
versatility and a large number of down-stream products make consumption demand of
this oil price-inelastic.

The major factors influencing the prices are

Production
Monsoon
Yield in other countries
Prices of substitute oils
Domestic and export demand
Seasonal factors
Stock availability
Development of new uses of the oil

In the international market, castor oil is one of the most expensive vegetable oils.
Despite India’s dominant position in the global castor market, we are not price-setters in
the Export market, but mere price takers.

One may observe from the prices below that the prices of castor seed and castor oil are
closely related to each other.

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Castor Seed

Annual Avg Price of Castor Seed in Mumbai Market

22000

20000 20,329
Avg Price (in Rs. per tonne)

18000 17,676
16,968 17,581 15,967
16000 15,873
15,949
15,921
14000 13,668

12000
11,494 11,464
10,425
10000

8000
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007

Souce: www.seaofindia.com

Annual Avg Prices of Castor Oil : Mumbai

50000

45000
44,123
Price ( in Rs. per tonne)

40000 39,408
37,185 39,492
35,398
35000 35,204 34,699 35,305

30000 30,229

25,796 25,998
25000
23,581

20000
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007
Source: www.seaofindia.com

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 Rs per Qntl

1400
1600
1800
2000
2200
2400
2600
2800
Castor Seed

Dec 2 2005
Jan 6 2006
Feb 13 2006
Mar 21 2006
Apr 26 2006
May 31 2006
Jul 5 2006
Aug 9 2006
Sep 14 2006
Oct 20 2006
Nov 25 2006

16
Jan 1 2007
Feb 6 2007
Mar 13 2007
Apr 17 2007
May 22 2007
Jun 26 2007
Jul 31 2007
Sep 6 2007
Oct 13 2007
NMCE Castor Seed Spot Price (Ahmedabad)

Nov 17 2007
Dec 22 2007
Jan 29 2008
Mar 4 2008
Apr 10 2008
May 20 2008