Futures trading halted on Thursday due to daily circuit. In spot markets too, prices took a beating due to lack of demand coupled with increased arrivals, brokers said.

According to traders, fall in castor oil prices, dismal performance in exports and rising inventory forced crushers to offload oil. In contagion, future and spot seed price crashed. Liquidity crunch, and bright crop prospect has dampened business sentiment. Bear operators commands the market. Small time traders also selling futures in anticipation of further fall in spot seed prices.

The February future has lost Rs 100 within a week due to aggressive selling. Some punters are unwinding outstanding positions as futures are approaching towarddelivery period. From February 1, one can make or take the delivery according to one's positions. All open positions will attract margin of Rs 20,000 per 10 tonne, by the end of first trading day of next month. Small time traders prefer to square off their open positions, instead of paying margin. Keeping this in the mind, traders have turned active in the parallel futures traded at Bhabhar. It will expire on February 16, 1999. Future prices crashed to Rs 291.50 per 20 kg from the recent peak of Rs 311, said traders.

In the spot market seed prices fell to Rs 1,550, from the all time high of Rs 2,500 seen in last August. Spot prices lost Rs 150 during the week. Confidence level of trade is falling because of delay of payment by some exporters. Only a handful of operators are creditworthy, said a broker. Liquidity crunch has added to the woes of trade. Castor oil prices fell to Rs 350 per 10 kg. Despite the sliding prices exporters are reluctant to buy. Jayant oil mills and Hind liver are the only playerswhose buying is relatively consistent.

Meanwhile exporters are keenly watching the visit of chief of Nidera, the largest global trader in castor oil. Recently he was in Ahmedabad which has generated immense curiosity among the local exporters. The purpose behind his visit to Ahmedabad is a matter of guess, but it assumes significance, said sources closed to him.

On the export front it's one of the worst year. The tug of war is going on between overseas buyers and indian exporters. The Indian shippers, who had burnt their fingers in the last year's `cornering, has became very cautious. No shipper is wiling to sell the oil in forward market. Overseas buyers are quoting much lower prices. For the ready delivery they quote $ 1000 ex tank Rotterdam. For the April delivery they are quoting $ 925. Recent devaluation of Brazil`s `real; will make it's export more competitive in the international markets.

Observers believes, balance is gradually shifting toward indian exporters. If Indian exporters keepperseverance, and do not go for price war, they will definitely win the game. Being the only supplier of castor oil, India can dominate the market, if shippers become united, he added. As far as crop is concern, prospects seem bright. Arrivals are increasing, albeit slowly. At present average arrival is around 30000-35000 bags of 70 kg.