ILMA Compoundings - February 2021 - 22

control in the mainland, this impact
has been alleviated, " added the Yip's
Chemical spokesperson.
" We actually foresee buying
more additives from China due
to more investments from major
additive companies in China, " added
Tingthanathikul, whose company produces lubricant and grease in Thailand
for exports.
Meanwhile, some blenders are
reviewing their supply chains. " The

lockdown situation disrupted supply
chains across the region, and some of
the blenders have been thinking to
reduce their reliance on imports from
other regions, " said Kumar. " This
helps them prepare themselves for
similar situations in future. "
Reducing lead times in the supply
chain is not new. " Generally speaking, many logistics managers were
already considering ways to shorten
and strengthen supply chains even

On Castor Oil
According to ILMA, in 2019, about
90% of the 450 million pounds of grease
manufactured in the U.S. used castor
oil derivatives as a key ingredient or a
grease thickener. India is a major global
supplier, and 95% of the castor oil
derivatives used in grease production
are imported from India.
However, when India declared a
lockdown from March 25 to May 3 last
year to prevent the spread of COVID-19,
the country's castor oil and shipping
industries came to a standstill. In early April, ILMA,
along with the National Lubricating Grease Institute and
the Society for Tribologists and Lubrication Engineers,
wrote to Indian Ambassador to the U.S., Taranjit Singh
Sandhu, U.S. Secretary of Commerce Wilbur Ross, U.S.
Secretary of State Michael Pompeo and U.S. Director
of the National Economic Council Lawrence Kudlow to
seek assistance to address the supply bottlenecks in
India. Subsequently, the three parties also engaged with
the working group from the U.S. Commerce Department's trade section.
Some Indian producers managed to export during the
lockdown. " According to a grease producer and major
exporter of hydrogenated castor oil (HCO) in Gujarat, they
could supply even during lockdown in April, because they
were accorded the status of 'essential product manufacturer.' As a result, their plant was always in operations, "
said Shailendra Gokhale, managing partner at Mumbai,
India-based Rosefield DAA International Consultancy LLP.
" The lockdown has [since] been eased in a phased
manner, " Bhasker Canagaradjou, head of Ipsos Strategy3,

FEBRUARY 2021

| COMPOUNDINGS | ILMA.ORG

before the pandemic, " said Andrew
Bower, sales director at OEC Group, a
trans-Pacific logistics company with a
regional office in New York. " This was
largely due to Trump tariffs, Hurricane
Harvey, One Belt One Road and a few
other factors. The pandemic, which
led to blank sailings, container shortages, skyrocketing rates, etc., reinforced
the narrative that closer is better.
" I think you will see the current
madness on trans-Pacific routes last

a global business consultancy, told Compoundings. " The
process started in June 2020. Most of the cities have
lifted restrictions, and the government has issued SOPs
for companies and manufacturing setups. Especially
in states like Gujarat, Andhra Pradesh, Rajasthan, etc.,
where most of the castor production happens, the
manufacturing sector started their operations toward the
end of the second quarter last year. Due to weak international and domestic demand due to the pandemic, castor
farmers were attracted by good prices of competing
crops such as peanut, cotton and other crops. This may
have resulted in lower sowing, which will have impact on
the quantum of supply and the price realization.
" With the vaccine already being rolled out and with
the reduced number of cases, it is very unlikely that
there will be another national lockdown, " he added.
" With the economy in the process of revival, the
government will not adopt another stringent lockdown
measure even if there is a second wave of cases; they
will manage it at micro-market level.
" Gujarat is the top grower of the castor oil seed
in the country, with Rajasthan, Andhra Pradesh and
Telangana being the other major producers, " he added.
" Considering the production volume, it is difficult to
replace Gujarat with any other states. In the short term,
there was some disruption in supplies. In the long term,
castor oil production is expected to grow considerably
in India in the coming years. "
India is the largest exporter of castor oil and has a
global market share of about 85% to 90%, according
to the Indian Commodity Exchange Limited, an online
commodity derivative exchange. From 2016 to 2017,
Indian castor oil exports declined by 11% year-over-year
due to a slowdown in global demand. But demand has
since recovered as market conditions improved in the
U.S., Netherlands, Russia and Japan.

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