The volatility has pushed many small-time operators in Rajkot and Surendranagar, into a debt trap with one of them recently finding suicide the only solution. Frightened by such `Kabada' (disruptive gamble) small traders now dread trading in such markets, and according to a few traders, some of the big genuine operators are now seeking greener pastures. Such exits by operators are the main cause for the declining volumes, they add.

Observers say, a few big operators at the Ahmedabad and Rajkot exchanges took advantage of the various developments in the country-cyclone, weakening rupee, shortage of castorseed crop et all. Included in this list of operators is one of the biggest domestic castor oil buyers from Mumbai who was desperately trying to swing balances in his favour. "There is something very unusual behind the recent price volatility", said an analyst. Some bigspeculators, have managed to control the market through their vice-like grip by using illegal derivative transactions (jota/phatak), he added.

Consider the price fluctuations for September 1998 delivery, castor seed contract on May 2 opened at Rs 1,305.25 and then jumped a high of Rs 1,452 on June 22 before dropping on the same day to Rs 1,430.50. The following day it recovered to Rs 1,445. On June 25, the prices dropped to Rs 1,430 due to hammering by bears. This drop in castorseed future prices, according to sources, was triggered off after the Kandla port authorities resumed port activities. This indicated there will be sufficient supplies of castoroil, if not sudden increase in its availability.

Traders opine that the high volatility triggered panic short-covering as well as heavy speculative selling by handful of operators. This trapped the small-time operators in the unofficial markets.

Large scale trading in the parallel (unofficial) markets at Bhabhar and Surendranagar influenced official futuretrading at Amhedabad and Rajkot exchanges, thus making it extremely difficult for genuine exporters to hedge their overseas exposures.

The castorseed market seems to have been stabilised, for now. But for how long? Trading community feels, the FMC should take deeper interest in the castorseed future exchanges. If FMC could take harsh steps on the Sangli turmeric futures, why does it stay away from doing the same in castorseed futures in Gujarat, traders say.