If all goes well, Gujarat, the largest producer of castorseed, will reap a record crop of 12 to 14 lakh tonnes against last year's 7.5 lakh tonnes. But a clear picture will emerge only by September end as sowing still continues, said a trader.

Futures market witnessed extreme volatility due to rampant speculation since the last few weeks. The December future was opened at Rs 1900, then it dropped to Rs 1648 due to heavy selling. However, prices rose steeply in last few weeks due to firm trend in spot market and short covering by bears. It touched Rs 2065 in kerb deals in the last fortnight. However, in absences of demand at such dizzyheights and support by bulls have prompted bears to sell and prices dropped to Rs 1721 in the last week, said a trader.

In the spot markets, prices dropped to Rs 500 per quintal in the last few days, said a dealer. It is recalled that in the last month, castor seed price touched to Rs 2500 per quintal, an all time high, which has created havoc among the exporters of castor oil. Surge in domestic prices have fuelled global prices also, which rose incredibly from $950 to $1500 within two months.

Since last six months, castor market has gone haywire. The spot seed prices rose from Rs 1400 to Rs 2500 per quintal within a short span of 3 months. Lack of buying had forced some stockiest to sell and prices dropped to Rs 2000 last week, said a trader. Bear operators, who were out of market since last two months, have been active again, as crop prospects are bright. Sentiments turn so bearish that most of the traders have ignored the surge in global prices.

In Europe, the main centre of non-edible oils,castoroil prices touched $1500 Ex-tank Rotterdam, a new high. At present large global traders is rigging ready prices.

In the forward markets, buyers are quoting $850 January-March, it is learnt. Overseas buyers are now not interested to buy forward in anticipation of ensuing good crop, feels an analyst. Meanwhile, recent crash in future prices has drawn attention of Forward Market Commission (FMC).

In the wake of volatility in futures, it has directed authorities of exchanges to retain clearings. It is believed to be a precautionary measure against any possible payment crisis. However, some brokers are not happy with the directive. A local operator said the directive will give bulls an unfair trade advantage. In response to the directive, Rajkot Exchange has passed an resolution, indicating it is not necessary to retain the clearing as daily clearing and price circuit are enough to ensure financial health, according to Haribhai Chhaganbhai, president of Rajkot Seeds and Bullion Dealers Association.Ahmedabad Seeds Merchant association has convened an emergency board meeting to discuss the matter last week. It has decided to relinquish this matter on FMC.