OPW Trendcheck December 2017 – Castor oil and castor oil derivatives

12. December 2017

2017 is drawing to a close. During the last quarter, prices have of castor oil remained largely stable. We would like to take some time to update you on the current market situation this month to make sure your planning for 2018 is accurate. November was an eventful month, and we struggled to keep abreast of severe price fluctuations at the source. At present, seed arrivals at the source amount to approximately 5,000 bags per day (1 bag equals 75 kg of castor beans). They peaked at 12,000 bags per day in November. Exports have nonetheless risen by approximately 40% compared to November 2016. Like in the previous year, it seems likely that farmers are planning to focus more intensively on peanuts, cotton seeds and legumes at the expense of castor beans. There is a surplus of approximately 350,000 tonnes this year, which is slightly short of the annual average. Forecasts for the upcoming harvest predict volumes between 1.2 and 1.3 million tonnes. The exact crop volumes will become known over the course of 2018. During last year’s harvest season, we experienced a strong drop in prices. The government has counteracted and stopped this trend by way of targeted purchases. We anticipate that there will be more governmental support for the agricultural industry in the next season. Due to the low surplus volumes, farmers will wait for the right moment to make the most profit. Demand from China is low and developing slowly on account of the pollution issue. This problem has made many European customers more cautious in their planning. To prevent surprises, farmers in Europe are storing long-term volumes and back-up stock. In China, production capacities remain limited. Low additional purchases are impacting prices positively. This will change drastically with the Chinese New Year in the middle of February 2018, however. Please check your requirements for the first quarter of 2018 until April, so we can make sure you are covered. Further developments will become clear in the first quarter, and we will then be able to lay the foundation for 2018. Your contact person will be happy to receive your enquiries.

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