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Castorseed declines on poor buying support

Our Bureau

MUMBAI, Feb. 25

IN a week characterised by relatively modest arrivals of castorseed in Gujarat and Andhra Pradesh, prices tended to sag as expectations of buyers now seem to be focussed on lower prices. Marketmen have begun to talk about the market turning in favour of buyers.

Although the Union Budget scheduled for February 28 is unlikely to have any major implication for the castor market, it remains to be seen what direction the market takes based on fiscal provisions for exports.

In the last Budget, the Finance Minister, Mr Yashwant Sinha, committed to phase out the 100 per cent tax-free status of export profits gradually, a reduction of 20 per cent per annum over a 5-year time frame. If this is implemented, then next year export profits will be tax-free to the extent of 60 per cent only. There is also possibility that duty-drawback and DEPB benefits may be whittled down.

During the week, market arrivals in Gujarat aggregated 2,30,000 bags, nearly a fifth lower than in the previous week, while in Andhra Pradesh arrivals at 31,500 bags showed only a slight decline.

Prices, however, weakened in the absence of any significant buying interest. Opening at Rs 242-243 per 20 kg, the market gradually edged lower to close the week at Rs 240/20 kg. In Hyderabad, too, prices reacted to indifferent purchase interest by soften ing to the extent of Rs 30 per quintal.

Soft seed prices found ready reflection in castor oil which in Ahmedabad declined by Rs 5 to Rs 274-275 per 10 kg, and in Hyderabad more sharply by Rs 8-9 to Rs 248 per 10 kg.

In the futures section, Ahmedabad and Rajkot exchanges reported Rs 5-6 per quintal improvement in prices, while Mumbai was down by Rs 8. An estimated 75,000 tonnes were traded in the exchanges during the week.

An export parcel of 5,900 tonnes left Kandla port during the week, while another ship with 5,500 tonnes was scheduled to depart on Saturday.