Castor trading at Kadi hits all time high

With an objective of enabling farmers achieve better price discovery on their agricultural produce and to provide commodity backed finance to increase their holding capacity, Agricultural Terminal Markets Network Enterprise (ATMNE), has been piloting a project in Kadi Taluka of Mehsana district in Gujarat.

Working with the National Spot Exchange Limited (NSEL) as an institutional trading and clearing member, ATMNE through its online trading terminal at Kadi, provides farmers access to NSELs commodity trading system, helping farmers realize the best possible price for their agricultural commodities.

Castor seeds, being the largest traded commodity in the area, saw peak volumes at the ATMNE trading centre with NSELs maximum member trading limit of Rs. 10 lakh (Rs. 1 Million) a day being reached on 1st September 09. All the trades were placed by farmers from villages surrounding Kadi. The new trading limit for ATMNE was set at Rs. 25 lakh per day.

Castor Seeds

Recent trends show commodity prices across the country on the rise on account of deficit in rainfall. Anticipating such increase in prices, a lot of farmers and traders have been storing castor seeds in their homes and backyards. Castor seed prices touched a high of Rs. 552 per 20 kg on 21st August 09.

However heavy rainfall in Andhra Pradesh, one of the major castor seed producing states in India, resulted in concerns among farmers/traders who were holding on to huge stock of castor seed in anticipation of a price increase beyond Rs. 600 per 20 kg. Also as per the IMD, it now seems that next year’s castor seed crop will not be as poor as was being anticipated. To capture profits before likely price reduction, farmers have begun to sell their stock.

Trading Terminal

Last few days of transaction details are given below:

Date                                                Amount  traded at Kadi   Rate
26/08/2009                                            152000                      537
27/08/2009                                            120000                      533
28/08/2009                                            772000                      535
31/08/2009                                            985000                      525
01/09/2009                                            1000000                    520

Given the fact that arrival of castor seed at the Kadi mandi and at the ATMNE trading centre had dropped significantly during the last couple of months, the sudden spurt in trading activity over the last few days is a welcome change.

—
Rajendra Kumar of ATMNE and Kshama Fernandes of IFMR Capital team, contributed to this post.