Demand-supply imbalance in castor-rye fuels bullishness

- Commodity Current: Jayavadan Gandhi

After Brazil, power outages in China have disrupted the business of a number of companies, large and small, affecting exports of many metals and energy commodities. Coal shortages in China have led to a power outage, which has led to a power outage and the closure of copper and aluminum plants, including businesses. After 15 years of pressure on prices due to declining aluminum supply, the tide is turning again. Brazil is also facing a power crisis due to severe drought. The driver class in Britain is shifting to Europe, and the shortage of manpower has affected the supply of petrol and diesel. In this situation, the government is also under pressure in India due to signs of a boom in fuel commodities. Gold prices rose by Rs 200 last week to Rs 200 on the back of a fall in Indian rupee exchange rates. Silver, on the other hand, rose by Rs 1,000 to Rs 500.

On the other hand, the government is constantly raising support prices as well as government procurement of agricultural commodities to quell the anger of farmers who are protesting against agricultural laws in the country. In the last one year, about Rs 2,000 crore has been procured from the country's agricultural markets. In addition, the government has hiked the support prices of wheat by Rs 50, cereals by Rs 3, chickpeas by Rs 150, barley by Rs 3, lentils and rye by Rs 200 and sunflower by Rs 115 as compared to last year.

Farmers did not get a chance to make a profit in oilseeds and soybeans but castor is expected to make a profit for farmers as well as investors due to higher prices this year. Last year, when castor prices went down to around Rs 400 to Rs 500, farmers reduced castor sowing. Prices were as high as Rs 200 in August this year on the back of rising local and foreign demand in the face of declining castor cultivation as well as lower production. Castor is mostly cultivated in Gujarat. Currently the monsoon is active but the real condition of the castor is likely to be realized after the monsoon. However, the market is likely to be more bullish on castor.

Currently, edible oils are the most expensive in the country. There is still a long way to go to become self-sufficient in edible oils. In order to increase the import of edible oils, the government has taken steps to control inflation by reducing the import duty as well as taking various measures including stock limit. The government is launching an edible oil portal to account for the outflows of edible oils.

After castor, there is a possibility of recovery in Rayada. Rayda oil is the most consumed oil in North India. It is most in demand, especially in the winter season. Rayda has no other choice. The government's ban on adulteration of edible oils has also boosted prices due to rising demand for edible oils. Even the merchant-peasantry, including the government, does not have significant stock of rye. Government purchases have not come out due to high prices. Due to the low income of Rayda in the market and increasing demand, Rayda market is currently at a high of around 200. Sales of farmers and traders are also declining due to the rising boom in Rayada. During the year 2021-22, the global production of Rayda is expected to fall to around 3 million tonnes. The country's rye crop is estimated to be around 3 million tonnes. With three to four months to go before the new rye crop arrives, farmers are expected to reap attractive profits from rye farming this year.