Castor Seed Co-operative Movement

A New Outlook & New Vision in Co-operative Movement

…from North Meridian Finance corporation .. Mumbai
Introduction
 Castor (Ricinus communis L.) is a non edible
oilseed, belonging to the Euphorbiaceae family.

 India is the leader in global castor production and

dominates in international castor oil trade.

 The Indian variety of castor has an oil content of

48%. Out of 48% about 42% of oil is being
extracted and the cake retains the rest.

 The Castor seed products have widespread

application in many industries like Paint,
Lubricant, Pharmaceutical, Textiles, etc.
Seasonality
 Castor is a perennial crop but grown as an
annual for economic purpose.

 Castor grows well in tropical conditions. It

grows best in heat and humidity.

 The crop duration is 4-5 months.

 The arrivals in the market start from January

onwards till mid of May.
Seasonality…2
 In India, it is sown in July/August and
harvesting commences around
December/January.

 The seeds are then dried, de-podded, bagged

and brought to the market yards for trading.

 The arrivals in the market start from December

onwards.
Seasonality…3
Processing of Castro Seeds
 Castor seed harvested from field is dried till the
pods open.

 Seeds are hulled by using de-hullers or by hand

to remove the seed from the pod.

 Seed contains about 50 percent of oil by weight.

 These seeds are cleaned, cooked and dried prior

to extraction.
Processing of castor seeds….2
 The first stage of oil extraction is pre-pressing,
using a high pressure continuous screw press –
called the expeller.

 Extracted oil is filtered, and the material

removed from the oil is fed back into the stream
along with fresh material.

 Material finally discharged from the press, called

cake, contains 8 to 10 percent oil.
Processing of castor seeds…3
 The first stage of oil extraction is pre pressing,
using a high pressure continuous screw press –
called the expeller.

 Extracted oil is filtered, and the material

removed from the oil is fed back into the stream
along with fresh material.

 Material finally discharged from the press, called

cake, contains 8 to 10 percent oil. It is crushed
into a coarse meal, and subjected to solvent
extraction with hexane orheptane.
Process flow chart
Uses…
 Castor oil and its derivatives are
extensively used in the manufacture of

 Surfactants
 Specialty soaps
 Coatings
 Lubricants
 Plastizers
 Paper inks
International Scenario
 Global castor seed production is almost stagnant
around 10-14 lakh tonnes in the past 7-8 years.

 Output touched all time high of 15 lakh tonnes

during 2005 as production has significantly
increased in India.

 Yield has drastically declined during 2006 and

reflected in total output.
International Scenario…2
 India is largest producer of castor seed and
constitutes about 64% of total global
production.

 Any changes in area and yield in India has

major impact on global castor output.
International Scenario…3
Global castor oil consumption
 Although India produces major percentage of
castor oil, its domestic consumption is limited.
China is the major consumer of castor oil, which
consumes about one third of total production.

 Other major consumers are Europe, India and

Brazil.
Global castor oil consumption
Indian Scenario
 Castor seed production has gradually increased
in the past few years. India recorded highest
output of nearly 10 lakh tonnes during 2005
with increased yields.

 Area is almost stagnant in the past few years,

however, increased yields of castor seed
contributed to higher output.

 Castor seed has recorded highest yield of 1216

kg per hectare in previous year.
Indian Scenario…2
 The sufficient rainfall and irrigation sources
especially in Gujarat have improved the yield in
India.

 Cultivation of castor seed mainly confined to

western states like Gujarat and Rajasthan both
together contributes 87% to total production.

 Gujarat has the largest share in India

production with 71% followed by Rajasthan
(16%).
Indian Scenario…3
Indian Scenario…4
Export-castor seed oil by India
 India is largest exporter of castor seed oil as it
is largest producer of the seed.

 Annually it exports about 1.8-2.0 lakh tonnes of

castor seed oil and receives huge foreign
earnings.

 Export volumes have marginally declined in the

past three years even as output has increased
during same period.
Export-castor seed oil by India…2

 Appreciating Rupee has affected the export

quantities, however, higher export prices
provided more earnings in terms of value.

 India exports more than 80% of total castor

seed output in the form ofoil.

 Only through Mumbai and Kandla ports and

2007-08 data till March 2008
Export-castor seed oil by India…3
Export-castor seed oil by India…4

 Castor seed meal is another major derivative of

castor seed exported by India.

 This oil meal exports have increased 4-5 times

in the past five years.

 India exported record oil meal of 3,30,475

tonnes during 2007-08 up from 65,550 tonnes
shipped in 2003-04.
Export-castor seed oil by India…5
Current production scenario
 Gujarat is largest producer of castor seed in
India and other major producers are Rajasthan
and Andhra Pradesh.

 It contributes about 70% of total domestic

output. Output is estimated around 9.09 lakh
tonnes in 2007-08, up by 16% from previous
year.

 Yield has been increasing significantly along

with area especially in Gujarat has resulted into
bumper harvest of the crop last year.
Current production scenario…2
 Area under castor seed has increased by
whooping 26% in 2007-08 to 3.54 lakh
hectares.

 Gujarat hashighest yield with 1838 kgs per

hectares.

 Higher rainfall last year mainly in western parts

of thecountry and improved irrigation facilities in
these two major states led to sharp rise in
output.

 Gujarat has about 20 castor seed processing

mills and major hub for castor seed industry.
Current production scenario..3
Market influencing factors
 Sowing and progress of south-west monsoon in
western parts of the country

 Production of castor seed in India and also in

China and Brazil

 Arrivals pattern in spot markets

 Export demand for Indian castor oil and exchange

rate

 Prices of other edible oils

Price analysis
 Castor seed prices have rallied by about 87% in
the last two years and touched all time high of
Rs.525 per quintal. Prices were almost range
bound around Rs.250-350 prior to 2006. Bullish
trend started from second half of 2006 and
prices never saw back.

 Strong export demand for castor oil and bullish

tone in other oils including crude oil, soy oil and
mustard oil supported the sharp rise in prices.
Soy oil prices have gained by around 85% and
crude oil prices moved up by more than 70% in
the same period.
Price analysis…2
Factors to be watched out
 Production during 2007-08 has been estimated
at 9.09 lakh tonnes increased by 16%compared
to last year

 Gujarat is largest producer with production of

6.5 lakh tonnes in 2007-08 and major hub for
castor seed industry

 Carry forward stocks were negligible due to low

output last year
Factors to be watched out…2
 India has exported 1.7 lakh tonnes of castor
seed oil in 2007-08 compared to 1.9 lakh
tonnesin last year (till March 2008)

 Prices have gained by 46% in last one year

Export demand remain strong especially from
China

 Export earnings have affected by appreciating

Rupee in the last one year

 Export prices are quoting around $1400 per MT

(FOB)
Price outlook
 Currently prices are quoting around Rs.500-520
per quintal in major mandis of Gujarat and
Rajasthan. Arrivals are likely to decline from
May month onwards from currently level of
90000 bags(75 kgs).

 Prices are likely to remain firm in short term and

may touch Rs.580-600 levels in short term to
medium term due to low arrivals and higher
exports.

 However, prices are likely to come down sharply

from Rs.600 levels in long term as sowing begin
from June-July.
Price outlook…2
 Prices may come down towards Rs.450 levels by
September – October.

 Recommended buying June NCDEX contract

around Rs.525-535 for target of Rs.580-600
(keep stop loss below Rs.490 if market fails to
move up).

 Selling positions can be taken around Rs.580-

600 (far month contracts) for long term holding
as prices turns bearish after sowing starts.
New Ventures : Contract Farming

 It is an initiative wherein, educating the

farmers about better farming techniques.

 Assisting the farmers in sourcing good

quality of hybrid seeds, fertilizers and
finance from the banks.

 The area under contract farming is

consistently increasing, and over the last
18 months,
Programes & Schemes : Agri-
implements Subsidies
Programes & Schemes : Agri-
implements Subsidies…2
Programes & Schemes : Agri-
implements Subsidies…3
Title : Assistance to National Agriculture Cooperative
Marketing Federation of India. (NAFED)

Type : Central Sector

Objectives : To strengthen financial position of NAFED for
increasing its business activities in marketing of
agricultural produce through state federations,
primary cooperative marketing societies etc. for
providing better prices to growers.

Salient features : This scheme also enables NAFED to undertake price

support operations, market interventions,
commercial purchases. It helps NAFED to play an
effective role in providing market support both
internally as well as promotion of exports.

Pattern of 100% per cent loan to the NCDC for passing on the
Assistance : same to the NAFED.
Programes & Schemes : Agri-
implements Subsidies…4
Title Assistance of National Cooperative
Federations.
Type Central Sector
Objective Financial Assistance to National Cooperative
Federation for promotion and development of
research & survey of projects.
Salient features Promotion of Technical & Consultancy
Services, Intensification of field studies,
research and statistical activities,
improvement of infrastructural
facilities/office buildings/ premises.
Pattern of 90% grant is provided by the Central
assistance Government and remaining 10% is borne by
the Federation.
Eligibility Federation comprising by and large of
cooperative for weaker sections or
predominantly with promotional role
suffering from the constraints of inadequate
resources.
Programes & Schemes : Agri-
implements Subsidies…5
Programes & Schemes : Agri-
implements Subsidies…6
Programes & Schemes : Agri-
implements Subsidies…7
Offering Castor seeds Exports

 Specification of Castor Seed

1.Foreign Matter-2.0%

2.Damaged Discolored Seeds-5.0%

3.Immature, Shriveled and Dead seeds-2.0%

4.Broken seeds-0.5%

5.Other Oil seeds-0.5%

6.Weevilled Seeds-1.0%

7. Moisture-5.0% max
8. Oil content: between 48-49%
Major Trading Centres
 The major castor seed markets in
Gujarat -
 Rajkot, Ahmedabad,
 Gondal, Gadwal,
 Bhabar, Disa, Kadi

Andhra Pradesh –
 Jedcherla

 Yemignoor.
Market Influencing Factors
 Variations in castor seed domestic acreage based
on yield and price realization,

 Crop development based on monsoon progress

in key growing regions

 Chinese and Brazilian crop size Comparative

price with other vegetable oils in the domestic
market,

 Upcountry demand of castor oil from the major

cities, Export demand of castor oil from US,
Europe and Japan

  
Market Influencing Factors…2
 The castor seed price tends to firm up during
the planting period and eases down during the
harvesting period. Prices tend to show inter-
seasonal variation of almost Rs 200 - Rs 350 per
quintal.

 Castor seed growers and crushers hoard the

commodity before selling in expectation of
better prices. Castor oil too can be kept in
containers without spoilage for long period.
Guiding light of India's Co-
operative movement
 India is land of Co-operatives.

 NCDC reported 5,00,000 Co-operatives

with membership of 207 million people.
 43.7% of Agriculture Credit
 60.5% of Sugar production capacity
 20% ofSpinning mill capacity
 30% of Fertilizer market
Guiding light of India's Co-
operative movement…2
 Co-operative possess Rs.1,16,555 million
as Share Capital

 Value of Asst & Working Capital Rs.

13,21,246.63 million

 Working Capital Rs.16,53,128 million

Guiding light of India's Co-
operative movement…3
 Share in National Economy

 Rural Net Work (Villages Covered) 100%

 Agriculture Credit Distributed 46.3%
 Sugar Produced (7,062 mn. tones) 54.95%
 Retail Far Price Shop (1,25,200) 28%
 Milk procurement to marketable surplus 10%
 Handloom 55%
 Storage Facilities (Village PACS) 62.5%
Principles of Co-operation

 Voluntary & Open Membership

 Democratic member Control
 Member Economic Participation
 Autonomy & Independence
 Education Training & Information
 Co-operation among Co-operatives
 Concern for Community
Problems of Co-operatives

 Poor performance & Loss of financial viabilities

 Lack of Professional management
 Excessive government control & Political
interference.
 Lack of good leadership
 Loss of focus on the prime objective & growing
alienation
 Poor board management relation
 Lack of performance based Reward System and
poor work environment
 Unlimited and Limited Liability
Castor Seed Co-operative
Movement – Why?
 Must being India’s highest share in world
market
 Attaining highest yield by technology oriented
Castro farming.
 Co-ordinating with farmers to organise them for
better earning with bigger pool to strengthen
them in competitive global market for sustained
growth.
 Additional Income apart from other agri produce
and milk.
 Professional management
Castor Seed Co-operative
Movement – Advantage
 Pooling together – higher yield, better
bargaining power, more cost effective,
better technology, more earnings etc.
 Sustained growth with long term
perspective
 Quantitative & Qualitative production for
better marketability in organised sector.
 Better market being varied application
 Dealing with corporate for market hence
dealing with organised market
Castor Seed Co-operative
Movement – Advantage…2
 High value addition in terms of various
application adding to the economic value.

 Better to deal with corporate with firm financial

commitments with Zero bad debts.

 Better judgment of market due to involvement

of corporate.

 Withstand in global market in organised

manner.
Castor Seed Co-operative
Movement – Feasibility

 Comprehensive usage of government machinery

under the co-operative sector.
 Pooling of various government incentive
collectively to better use and rapid growth.
 Creating better share in world market with
organised export.
 Collective bargaining.
 Collective funding to crate better capital
structure to strengthen the financial base.
 Better scope of Diversification and growth
Castor Seed Co-operative
Movement – Financial Matrix

 Collective bulk capital creation

 Collective usage of government subsidies for
cost effectiveness.
 Availability of self-employed entrepreneur
human work force.
 Associate with international co-operative
organistion with involvement foreign equity to
organise internationally
 Exposer to international commodity market
 Adding better value to GDP of nation
 Creating Social entrepreneurship
Medicinal Properties and Benefits

 A poultice of castor seeds can be applied

with gratifying results to gouty and
rheumatic swellings. A decoction of the
roots of castor plant with carbonate of
potash is useful in the treatment of
lumbago, rheumatism and sciatica. A
paste of the kernel without the embryo,
boiled in milk, is also given as a medicine
in these conditions.
Medicinal Properties and
Benefits…2
 Castor oil is a harmless purgative. It
simply passes out after completing its
purgative action, making the patient feel
a mild irritation in the anus at that time.
Administering of castor oil as a purgative
is very simple. About 30 to 60 grams of
pure odorless castor oil is given orally
with 250 to 375 grams of lukewarm milk.
It acts just after an hour.
Medicinal Properties and
Benefits…3
 A poultice of castor leaves is useful
as an external application of boils
and swellings. Coated with some
bland oil such as coconut oil and
heated, the hot leaves can be
applied over guinea-worm sores to
extract the worms. A poultice of
castor seeds is also applied to
scrofulous sores and boils due to
tuberculosis of lymph nodes.
Medicinal Properties and
Benefits…4
 Castor oil massaged over the breast
after child-birth increases the flow
of milk, as it stimulates the
mammary glands. The leaves of
castor can also be used to foment
the breast, for the same purpose.
Medicinal Properties and
Benefits…5
 Castor oil massaged over the body, before bath,
keeps the skin healthy and imparts sound sleep.
Such an oil bath may be taken once in a week.
Applying castor oil over hand and feet before
going to bed keeps them soft and similarly over
the eyebrows and eyelashes keeps them well-
groomed

 If used regularly as hair oil, it helps the growth

of the hair and cure dandruff.
Medicinal Properties and
Benefits…6
 Precautions

Repeated use of castor oil as a laxative should

be avoided as it causes secondary constipation,
that is, recurrence of the condition after cure.
Persons suffering from kidney infections should
not take castor oil as a purgative. It should also
not be used when there is abdominal pain or
intestinal infections such as appendicitis,
enteritis or inflammation of the small intestine
and peritonitis. Large doses of castor oil during
the early months of pregnancy may cause
abortion.
CONCLUSION…

 Right time to turn around

 With changing economic scenario
and India’s global status envisaging
better export market.
 Involving global participation in Co-
operative movement to with
enhanced agri technology and
finance for the vertical growth.
Thanks….

 For any assistance in contributing to

this movement contact us ensure
the success of this movement NMFC
is always with you all the way….
 Thanks………….