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MOMENTUM OF TIME: Castor Oil Consumption Outlook and Emerging Trend- India
1. MOMENTUM OF TIME
Castor Oil Consumption Outlook and
Emerging Trend- India
Presented by :
Atul Chaturvedi
President, The Solvent Extractors’ Association of India &
Director – Adani Wilmar Limited
At
Global Castor Conference 2018
24th February, 2018, Ahmedabad, Gujarat
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2. MOMENTUM OF TIME
2
Global Economic Scenario
✓ The global recovery has strengthened
✓ Reduced Corporate Tax in US to stimulate activity in near-term
✓ Euro Area – Germany, Italy & Netherlands reflected stronger momentum.
Growth in Emerging & Developing Europe exceeded 5%
✓ Growth is expected to moderate gradually in China
✓ Despite a correction in 2017, India is still a bright spot in longer term
2016 2017 2018 2019
World 3.2 3.7 3.9 3.9
Advanced Economies 1.7 2.3 2.3 2.2
US 1.5 2.3 2.7 2.5
Europe 1.8 2.4 2.2 2.0
Emerging Market &
Developing Economies
4.4 4.7 4.9 5.0
China 6.7 6.8 6.6 6.4
India 7.1 6.7 7.4 7.8
Source : World Economic Outlook - Jan 2018, IMF
GDP Growth Percent Change YoY
3. MOMENTUM OF TIME
3
✓ Stable political Environment
✓ Strong & Decisive Government
✓ Digitalization expected to create efficiency. However still not stabilized.
✓ Tax Reform (GST) expected to streamline the system - still work in process.
✓ Indian Rupee – range bound around 64-65 per $
✓ Interest rate – around 8 to 9 %
✓ Stock Markets are buoyant-Post Budget major correction has taken place.
✓ CPI Inflation seen at 5.07% during January 2018.
✓ Fiscal Deficit estimated @ 3.5 % of GDP for year ending March 2018
✓ Due to increased crude prices, Current Account Deficit has increased to around 2%
of GDP
✓ Every 10$ a barrel jump in oil price brings down GDP by 0.2-0.3% and worsens
CAD by $9-10 bln
Indian Economic Scenario
4. MOMENTUM OF TIME✓ Over 58% of Rural households depends on Agriculture as primary source
of livelihood
✓ Agriculture as a sector contributes 18 percent of the GDP
✓ Agri GDP growth hovering around 2%
✓ Agro is now the focus of Policy Makers. Rural distress endemic
✓ Total production is estimated at an all-time high of
Food grain : 275 mmt
Pulses : 22.95 mmt
Oil seeds : 37.5 mmt
(incl. cotton & copra)
✓ Indian farmer’s responsiveness to price signals has increased over the
years ….Pulses is a case in point.
✓ Government’s intention of formalising MSP structure may also affect
sowing patterns.
✓ Castor prices remained subdued which discouraged the Indian farmers
and lost acreage to competing crops during last two years
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Agriculture in India
5. MOMENTUM OF TIMECastor seed Sowing Area
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▪ Castor seed sowing during last two years has been lowest in last 8 years
▪ This is majorly contributed by lower price realisation by farmers during recent
years and also due to good & timely monsoon
➢ We estimate a crop of 1.35 mmt
➢ We may hear more about the crop estimation later in the day
454 519
872
780
622
734 781
565 595
117
126
181
148
192
213
198
171 131146
186
241
204
128
111 93
74 4447
53
43
45
42
42 36
30
22
0
200
400
600
800
1000
1200
1400
1600
2009 2010 2011 2012 2013 2014 2015 2016 2017
Others
AP/Telangana
Rajasthan
Gujarat
6. MOMENTUM OF TIMECastor Oil Export Trend
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➢ Annunalised growth of Castor Oil Exports from India is 7.5% since last 10 years
➢ Castor oil exports during 2016-17 increased only by 2.5% due to slowdown of
Sebacic production during Nov16-Jan’17 which got compensated by increased
imports during current year.
7. MOMENTUM OF TIME
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Castor Oil Export Trend
▪ Imports by Europe & US is steadily increasing at around 5% annually
▪ Imports by China growing little faster than other destinations
▪ Deviation in quantities to China during 2015-16 & 2016-17 was due to
relocation of stocks through Malaysia
8. MOMENTUM OF TIME
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Castor Balance sheet
Quantity in ‘000 MT
Particulars 2017 2018 P
Castor seed Crop 1050 1350
Carry in from previous year 1000 250
Seed available for crushing 2050 1600
Castor oil available 940 735
Castor oil Export 625 650
Castor Derivatives 150 155
Domestic consumption 50 50
Total Disappearance 825 855
Carry forward (oil form) 185 -120
Carry forward (seed form) 250 -260
✓ Tight demand supply
scenario was postponed
by one year due to
unexpected higher
opening stock during
2017
✓ We estimate an export
demand of 650kt of
Castor oil during 2018
✓ Prices have to rise to
cater to increasing
demand and decreasing
availability.
10. MOMENTUM OF TIME
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Balance sheet Basis Government Numbers
✓ Our analysis basis Government Numbers shows Carry-in of 1.3
mmt as on 1st January 2018
✓ First Advance Estimate of Castor Crop by Government for 2017-18
is 1.396 mmt
✓ Basis above, total availability would be 2.7 mmt
✓ Total expected disappearance of 1.85 mmt during 2018 would leave
a carry-out of 0.85 mmt
✓ This is totally at Variance with Trade Estimates
Food for Thought
11. MOMENTUM OF TIME
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Mr. Atul Chaturvedi, President
The Solvent Extractors’ Association of India
A Premier Association of Vegetable Oil Industry & Trade in India
ISO 9001:2015 Organisation
142, Jolly Maker Chambers No. II, 14th Floor, 225,
Nariman Point, Mumbai 400 021
Tel: (+91-22) 2202 1475. 2282 2979, Fax.: (+91-22) 2202 1692
Email: solvent@mtnl.net.in , Website:www.seaofindia.com
