23 June 1998
Shortages push up price of castor oil

A BIG setback in the castor seed crop in Brazil is set to jack up the prices of castor oil.

Brazils crop is expected to drop to 50,000 tonnes, from 150,000 tonnes last year.

India, which produces nearly three-quarters of the worlds castor oil, is also harvesting a smaller crop this season.

One analyst at the Oil Market Association in Calcutta said castor seed prices had risen from Rps2,000 ($47) a tonne last January to over Rps14,000 a tonne. He forecast there would be a world shortage of 100,000 tonnes.

Indias new international castor oil futures exchange is expected to start trading within the next two months, but it is unlikely to attract foreign trading houses as members until the Indian Government allows dollar-denominated trading.

Foreigners will not want to expose themselves to fluctuations in Indias currency.

  • Financial Times 23/06/98 page 36