Castor oil export hit by US-China trade battle
Escalating trade battle between the US and China has impacted India’s castor oil exports adversely as exports of the commodity have gone down by 8.8% in April 2019.
Economic measures taken by the Trump government against Chinese goods have resulted in sluggish demand from the industrial units of the neighbouring country.
According to recent figures from the Solvent Extractors Association of India (SEA), export of castor oil was 45,987 million tonne in April 2019, against 50,312 MT in the corresponding period last year.
A senior executive of one of the biggest castor oil exporters based in Gujarat said if the trade-related tension continues between the US and China, castor oil exports would further go down.
Apart from trade war, spiralling prices of castor oil and constant volatility in rupee have further aggravated the situation, he said, adding that in value terms export of castor oil increased from Rs 446 crore to Rs 510 crore during the period.
“However, it is not a healthy sign for castor oil exporters. Hopefully, declining trend of castor oil would end. We are expecting a good monsoon ahead, which would bring down the soaring prices of castor automatically and exporters would be able to cater to global demand successfully,” he said.
India is the largest producer of castor and castor oil in the world with almost 90% share. In India, Gujarat has a lion’s share of 80% in the production of castor and castor oil. Castor oil and its derivatives are used in many industries including air-conditioning, air-fuel, pharmaceuticals, dyes & chemical, soap, paints, inks, plastic, perfumes, adhesive, paper, lubricants, food and rubber, among others.
Apart from Gujarat and Rajasthan, Telangana and Andhra Pradesh are major producers of castor. Internationally, Brazil and China have also cultivated castor but their share is nominal.
Overall export of castor oil witnessed decline during 2018-19 to 5.61 lakh MT from 6.51 lakh MT in the previous financial year.
Apart from China, the US and European Union (EU) are the largest importers of castor oil from India. China’s share in nearly 40% in India’s total exports. Currently in domestic market, prices of castor and castor oil are hovering around Rs 1,080-Rs 1,100 and Rs 1,145-Rs 1,150 per 20 kg, respectively.
Source :- Financialexpress.com