For the Quarter Ending December 2024
North America
Throughout Q42024, the North American region witnessed a notable drop in Castor Oil prices, driven by a confluence of factors. Despite weak castor seed harvests in major producing countries like India, global castor oil availability remained high, driven by ample supply from other regions. Demand for castor oil, however, softened due to muted industrial activity, with many sectors shifting to alternative oils or synthetic substitutes.
Competitive pricing from Indian exporters, bolstered by favorable exchange rates and lower production costs, intensified the downward trend, further undermining U.S. suppliers' market share. In October, a slight improvement in the U.S. Manufacturing PMI indicated minor stabilization, yet ongoing supply chain disruptions and pre-election uncertainty kept demand subdued. As the month progressed, weakening export demand and stable but pressured prices marked the castor oil market, with U.S. buyers facing less price volatility but limited growth. By November, the manufacturing sector showed signs of stabilization, with reduced inflationary pressures and a slower pace of cost increases, providing a more favorable economic environment. However, weak demand persisted, and market volatility remained, exacerbated by global production delays and weak export demand.
December saw a further decline in prices, with high inventories and reduced downstream demand pushing suppliers to lower prices to expedite turnover. Competitive pricing from India, a stronger U.S. dollar, and smoother supply chains further pressured prices down, exacerbating the subdued market environment. While the outlook for the first quarter of 2025 suggested a potential recovery, the market in December was marked by reduced procurement due to seasonal slowdowns and holiday-related lulls.
Asia Pacific
During the entire fourth quarter of 2024, China's castor oil market witnessed an overall downward trend. In October, imports rose due to increased demand from sectors like lubricants, cosmetics, and bio-based plastics, fuelled by China’s industrial growth. However, crop failures in India reduced global supply, while re-export prices dropped as domestic supply met local demand, reducing the need for re-exports. This shift towards a consumption-driven market changed global dynamics. Despite an improvement in China’s manufacturing PMI, export orders continued to decline, and rising input costs strained the economy. By November, weakening demand from key industries, including pharmaceuticals and personal care, led to a further drop in castor oil prices. Economic challenges and cautious inventory management contributed to this downturn, with reduced imports and re-export activities. In December, the market saw continued price declines due to weak demand, logistical adjustments, and the depreciating Chinese yuan. As a result, suppliers continued to scaled back purchases, and re-exports remained sluggish, leading to a pessimistic outlook and limited trading activity.
Europe
Castor oil prices in France during Q4 2024 are expected to follow a global downward trend, influenced by both local and international factors. Globally, weaker demand from industries like cosmetics and pharmaceuticals, alongside increased inventories from major exporters like India, is driving prices lower. India's improved production and logistics have led to competitive pricing, impacting Europe, including France, where demand remains subdued and supply levels adequate. The depreciation of the euro against the dollar has further reduced import costs, contributing to the decline. Domestically, competition among suppliers and shifts in consumption may cause minor fluctuations, but a general price decline is expected. France's manufacturing sector faced challenges, with the HCOB France Manufacturing PMI falling to 44.5 in October 2024, reflecting weak domestic and foreign demand, particularly in construction. Geopolitical tensions and the global economic slowdown further suppressed demand. By November and December, castor oil prices continued to drop, driven by oversupply, weak consumption, and lower exports, compounded by competition from alternative oils.
For the Quarter Ending September 2024
North America
Throughout Q3 2024, the North American region witnessed a notable surge in Castor Oil prices, driven by a confluence of factors impacting the market dynamics. Several key reasons contributed to the significant price increases observed during this period.
Demand for Castor oil remained strong, particularly from the Asia-Pacific and North African regions, where its competitive pricing compared to alternative edible oils fueled substantial purchasing activity. This spike in demand further strained available stocks, intensifying supply shortages and escalating prices. Furthermore, Currency fluctuations, particularly the depreciation of the US dollar against major currencies, added another layer of complexity to the market dynamics. As a result, this scenario highlights the fragile interconnectedness of global commodity markets, where supply chain disruptions, lower availability ahead of reduced production, and higher demand from the end-users ripple through to a significant impact on the Castor oil industry.
Overall, within the North American region, In the USA specifically, the market experienced the most pronounced price changes, with a 3% increase from the previous quarter, indicating a continued upward trend. The quarter ended with a price of USD 1900/MT for Refined Castor Oil (FSG Grade) CFR Houston, reflecting the overall positive pricing environment characterized by increasing prices and a tight market situation.
Asia Pacific
Moving forward throughout the third quarter of 2024, the APAC region experienced a notable increase in Castor Oil prices, driven by a combination of factors that influenced market dynamics. Adverse weather conditions in key castor seed-producing regions led to lower harvests, creating a supply shortage that put immediate pressure on production and distribution costs. Global demand for Castor Oil and its derivatives saw a sharp uptick, particularly in sectors like food and renewable energy, further fueling the price surge. Rising energy and transportation costs added to the overall increase in prices, impacting the market sentiment. While the situation is further complicated by a decrease in stocks of other edible oils. Deep processing enterprises and port areas saw a sharp decline in Castor Oil arrivals. In order to stimulate arrivals, deep processing enterprises, and other regions raised prices to destock their inventory, driving the domestic Castor Oil market price to continue to rise. This strategy aims to capitalize on the supply constraints and increase global prices.
In China, the market witnessed the most significant price changes during the quarter. The pricing environment showed a consistent upward trend, with seasonality playing a role in the market dynamics. As a result, the quarter-ending price of USD 2195/MT of Refined Castor Oil (FSG Grade) (Re-Export) FOB Qingdao and USD 1620, CFR Shanghai highlighted the overall trend of rising prices in the region.
Europe
In the third quarter of 2024, the European Castor Oil market experienced a steady upward trend in prices, driven by several critical factors. Limited availability of raw materials constrained supply, while downstream sectors exhibited strong demand, further exacerbated by rising freight costs. This supply-demand imbalance exerted significant upward pressure on prices, with a 4% price increase compared to the previous quarter. Seasonality and market sentiment played substantial roles, as speculative buying and consumer panic due to fears of future shortages intensified the tight supply situation. The Netherlands was at the forefront of these price changes, reflecting the broader European market trends. By the end of the quarter, the price of Refined Castor Oil (FSG Grade) CFR Rotterdam reached USD 1775 per metric ton. Disruptions in production and plant shutdowns during this period further complicated market dynamics, adding to the uncertainty in supply. Overall, positive sentiment prevailed throughout Q3 2024, with expectations of continued price increases. The combination of constrained supply, high demand, and market speculation contributed to the persistent upward trajectory in Castor Oil pricing, signaling ongoing volatility and potential price pressures moving into the subsequent quarter.
For the Quarter Ending June 2024
North America
Throughout the second quarter of 2024, the North American Castor oil market demonstrated resilience and stability, showcasing an overall positive trend. This period was characterized by a delicate balance between steady regional consumption and global supply chain challenges, resulting in a cautiously optimistic pricing environment.
Key industries such as pharmaceuticals, cosmetics, and personal care continued to drive strong demand, providing consistent support for prices. This robust consumption was met with supply constraints, primarily due to ongoing global supply chain issues. Logistical complexities, including container shortages and increased freight rates, contributed to higher transportation costs and extended lead times, further influencing the market dynamics. The USA, in particular, experienced the most notable price fluctuations. The market displayed a stable yet upward trajectory, buoyed by seasonal demand patterns and persistent procurement from downstream industries. The interplay between supply limitations and high demand was evident, with the depreciation of the US dollar against other currencies amplifying import costs and subsequently elevating domestic prices.
Environmental factors also played a role in shaping the market, with declining water levels in major transportation routes adding another layer of complexity to logistics and overall costs. These challenges, combined with geopolitical tensions, further accentuated the upward pressure on prices. The quarter concluded with a 7% increase compared to the previous quarter, indicating a relatively stable market sentiment. By the end of Q2 2024, the price for Refined Castor Oil (FSG Grade) in the USA reached USD 1800/MT, reflecting the market's resilience and adaptability in the face of various challenges. This pricing environment underscores the castor oil market's ability to maintain stability while navigating complex global economic and logistical landscapes.
Asia Pacific
In Q2 2024, the APAC region's Castor Oil market experienced a positive shift, showcasing resilience and adaptability. Despite initial challenges, the market demonstrated remarkable recovery potential. The temporarily diminished demand from key downstream industries such as lubricants, pharmaceuticals, and cosmetics created opportunities for market diversification and product innovation. The surplus supply of castor oil, initially seen as a challenge, allowed for competitive pricing strategies that attracted new buyers and opened up emerging markets. This oversupply situation encouraged manufacturers to explore novel applications for castor oil, potentially expanding its use in sustainable and eco-friendly products. Economic concerns initially impacted the market, but they also spurred efforts to enhance efficiency and reduce production costs. This led to a more streamlined and competitive industry. Trade tensions and elevated global freight costs prompted local sourcing initiatives, strengthening regional supply chains and fostering closer relationships between producers and consumers. South Korea, while experiencing price changes, leveraged its position to become a regional hub for castor oil trade. The country's robust infrastructure and strategic location allowed it to capitalize on the market fluctuations. The seasonal off-peak period was utilized for maintenance, research, and development, preparing the industry for future growth. The 2% price decrease from the previous quarter, rather than being a negative indicator, represented a market correction that improved affordability and stimulated demand. Rising transportation costs and currency depreciation challenges were met with innovative logistics solutions and financial strategies, showcasing the industry's adaptability. Overall, by the end of Q2 2024, the price for Refined Castor Oil (FSG Grade) in South Korea at USD 1580/MT reflected a stabilized market ready for future growth. This period of adjustment set the stage for a more balanced and sustainable Castor Oil market in the APAC region, with improved market dynamics and potential for expansion in the coming quarters.
Europe
In the second quarter of 2024, the European Castor Oil market experienced a complex pricing dynamic characterized by an initial downward trend followed by a modest upturn towards the end of the period. This market behavior was influenced by a combination of factors that created both challenges and opportunities for industry participants. The quarter began with a decrease in prices, primarily due to reduced demand from key sectors such as pharmaceuticals, personal care, and industrial applications. This situation was exacerbated by economic pressures and elevated energy costs across the region. However, this initial downturn created favorable conditions for strategic inventory management and market repositioning. Geopolitical tensions, particularly the disruptions caused by the Houthis' campaign against Israel in Gaza, initially posed logistical challenges. Yet, these circumstances also prompted industry players to develop more resilient supply chains and explore alternative sourcing options, potentially leading to long-term improvements in market stability. France, as a key market, experienced significant price fluctuations. The initial oversupply and high inventory levels led to price adjustments, which ultimately helped balance the market. This correction phase allowed for more competitive pricing strategies, potentially stimulating demand from price-sensitive sectors. The -1% change between the first and second quarters indicates a gradual stabilization of the market. This trend suggests that the industry was adapting to the new market conditions, with prices finding a more sustainable equilibrium. By the quarter's end, with Refined Castor Oil (FSG Grade) in France priced at USD 1620/MT, the market showed signs of stabilization. This price point, while reflecting the quarter's challenges, also positioned the market for potential growth as industries adjust to the new pricing environment and explore innovative applications for Castor Oil.
For the Quarter Ending March 2024
North America:
In North America, especially in the United States, the castor oil market kicked off the first quarter with a downward trend, followed by a slight uptick in February and ending on a positive note in March. Initially, in January 2024, the USA, a key importer, took steps to boost its global competitiveness. This resulted in downstream processing companies adjusting their procurement strategies due to higher stockpiles, leading to an overall downward trend. Demand from downstream industries remained sluggish, prompting merchants to focus on clearing their stocks at reduced prices. Additionally, trading activity in the country was subdued, with rising freight charges ahead of the Red Sea disputes causing significant delays in consignments and higher shipping costs, discouraging traders from issuing new quotations and focusing on trading existing inventories.
However, as the quarter progressed, the US experienced a notable uptick in castor oil prices, driven by increased downstream purchases from end-users adapting to evolving market dynamics. Initially, positive market trading activity for castor oil was observed due to adequate supply levels. There was a gradual rise in regional inquiries, prompting merchants to increase their stock levels and issue higher quotations in producing nations. Challenges such as the continued concerns over decreasing inventories and delayed shipments due to recent Red Sea disputes posed threats to economic growth, creating a supply-demand imbalance scenario across the region.
Moreover, in March, the market showed resilience as freight charges eased significantly, leading to a noteworthy resumption of trade activities and shipments, thereby improving commodity availability for downstream suppliers. However, with a continuous uptick in the demand side, the stocks among suppliers remained low thereby affecting the overall supply-demand outlook. Nevertheless, suppliers adjusted their pricing strategies to capitalize on increasing demand from end-user sectors, particularly oleochemicals, and food, with positive trends in market transactions. In summary, the first quarter witnessed an optimistic trajectory for castor oil prices, reflecting an imbalance between supply and demand.
Asia Pacific:
Across the APAC region, castor oil prices followed a mixed trajectory throughout the first quarter of 2024. In India, the market began on a bearish note, continuing this trend until the middle of the quarter, with March rebounding considerably. Until February, castor oil prices continued to drop due to an abundance of stocks in key markets like Rajasthan and Gujarat, alongside lower demand during the ongoing harvesting season that starts in December each year. This surplus in supply was a key factor driving the price decrease. Additionally, the unexpected passing of a prominent figure in the castor oil industry affected market sentiment, leading to short-term trading adjustments that could have influenced the prices. February also witnessed a decrease in castor oil exports, causing export market prices to decline notably as major importing countries like China closed markets ahead of the Lunar New Year. This resulted in reduced demand and slower trading activity within the region. However, towards the end of the quarter, the market started to recover, with regional traders focusing on selling off their inventories at higher prices. Increased demand for castor oil in various sectors like biodiesel, soaps, cosmetics, and lubricants further supported this. Additionally, the arrival of large quantities of harvested seeds increased the need for extra storage facilities, potentially raising storage costs for processors and traders, and indirectly affecting the final product price. Similar market trends were observed in importing nations such as South Korea and China, where market fluctuations were influenced by regional inquiries and trader activity. Considering the export market from China, market activity remained affected until February due to the Lunar New Year holidays, which significantly affected goods availability across various regions. However, in March, market activities resumed as the Lunar New Year holidays concluded, signaling the initiation of production processes and the introduction of fresh inventories into the regional market. Domestic demand emerged as a pivotal factor propelling the surge in prices, prompting international off-takes to rise in response to the market reopening and the opportunity to secure bulk inventories. This upward momentum maintained pressure on exporting prices of castor oil for several importing regions, including Pakistan, Vietnam, and Thailand, all heavily reliant on China as a primary source of castor oil imports. Overall, castor oil within the APAC region ended the first quarter of 2024 showcasing an optimistic trajectory with a balanced supply-demand outlook.
Europe:
In the European market, particularly in the Netherlands, Castor Oil pricing displayed a nuanced pattern influenced by several factors. Although there was an overall upward trend, the market began with a bearish tone in January 2024. This downturn was attributed to subdued downstream purchasing and the onset of the harvesting season in major exporting nations, which was expected to flood the market with an excess supply of castor seeds, potentially lowering Castor Oil prices. The ongoing Red Sea dispute further complicated matters, creating geopolitical tensions that disrupted international trade and led to reluctance among merchants to place new orders. However, as February 2024 began, there was a modest rebound in Castor Oil demand, particularly from end-user sectors like pharmaceuticals, cosmetics, and food industries, which improved pricing. Exchange rate fluctuations added another layer of complexity to the pricing dynamics of imported vegetable oils, including Castor Oil. Challenges in global supply chains, such as container shortages and port congestion, along with geopolitical tensions related to the Red Sea dispute, continued to keep freight costs high, impacting overall importing costs for the Netherlands. This trend persisted until the final weeks of March 2024, with a continuous rise in downstream purchasing activity from sectors like personal care and pharmaceuticals. A decrease in freight charges thereby provided some resiliency among the market participants with respect to procurements of newer quotations of castor oil. The currency depreciation, particularly the devaluation of the euro against the US dollar, prompted merchants to focus on selling goods at higher prices to make up for their previous losses, thereby leading to an overall price increase in the market.
