The sesame market once again has surprised many. In our last report, we had expected a correction of 4-5 % but the market went down by around 3 ½ % and it has again gone up by 4-5 %. The export demand is moderate but steady at this price level but since there is scarcity of raw material especially for hulling, the prices are stable at increased level.
Below given are some facts of the current market:
- The supply situation in India is worsening day by day. It can be said that there is almost a physical shortage of goods in the market. It appears that India will have to import not less than 50,000 tons of cargo suitable for HSS.
- The quality of raw material suitable for hulling is extremely poor which is affecting the yield of the hullers.
- Almost all buyers’ pockets are empty & they are covered hand to mouth. Thus moderate & steady demand is expected to continue for rest of the year.
- The summer crop in India will be harvested in May 1st half but most of it will be 99×1 & 98×2 type quality which is mainly of edible grade and hence the hullers may not get much relief for their required Raw Material. Here one should not forget that, the domestic consumption in India is growing rapidly and this quantity of 40,000 – 50,000 tons appears to be insufficient to take care of the domestic as well as the Korean demand.
- The presence of South and Central America as suppliers of HSS is weakening due to various factors and most of the countries are depending on India which is the only reliable source offering competitive prices for a good quality Hulled Sesame Seeds.
- In the recent Sesame Conference held in China, it was noticed that, the stock level in China was extremely poor and quantity of around 30,000 MT was in transit which will reach China in coming fortnight. But this will be enough only to take care of their requirements of April-May and it is expected that, they will be in market for their requirements of June onwards. In the same fashion Turkey, Egypt, Mediterranean as well as Middle East countries are also likely to be in market for their requirements of the rest of the year. Despite of the world-wide recession, this moderate demand may give a consistent support to the market.
- The African new origins will be available only during May end –June and most of that will probably go to Japan. The quantity will be approx 70,000 to 75,000 tons.
Friends, by presenting these facts, we are not advocating that the market should go up but what we are trying to communicate is that, one should not expect the market to go down drastically from the current levels. The market may fluctuate either way by 3-4 % but a drastic fall in prices should not be expected.
Assuming that the prices of sesame seeds suitable for hulling will be in the range of USD 1240 – 1270 PMT (delivered Warehouse), the Premium quality HSS cannot be offered for a price of not less than USD 1820 – 1840 PMT FOB. But at present due to shortage as well as high price level of raw material, exporters are reluctant to offer at lower prices.
Disclaimer: While the above mentioned predictions are based on rational thoughts, the actual situation may not be the same. This is our personal view of the Sesame Seeds Market in particular and on agricultural products in general.
This document may be used for private circulation only.