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Tuesday, September 22, 2015

Sesame Seed New Crop 2015

Hello Everyone ,

Im sure everyone is already aware , the new Indian Sesame crop is just around the corner.

Sowing this year has been great owing to some early monsoon rains and timely news of a low rainfall year. The farmers reacted in time and a lot of area was diverted to low water crops , sesame ofcourse being one of them.

The weather to a great extent has been favourable for a great harvest season , however a fairly long dry spell after Mid August all the way till now may affect the yields in certain areas where irrigations facilities are minimal. Having said that the overall increase in acreage might just negate any such losses and we should still see a huge crop ahead.

We’ve already witnessed the first signs of that as the markets have been discounted over 20-25% just on this news alone , the other factor ofcourse being the Rupee-USD ratios. The values have declined by almost 10% Y2Y basis.

Recently there was a conference on Sesame Seed in China where big players from all over the globe came and presented their views , just summarizing that for everyone around who was not there.

1:- China crop once again has been short , we’ve not seen a growth year in china for I think a decade now , the area for sesame seems to be reducing each year and some heavy rains led to further damage. The crop may be shorter by around 70,000-80,000 Mt compared to last year. However going by the business and consumption trends of china I’m not really worried about their crop size anymore, they are the biggest importers and consumers now and no matter what , they will go out and buy from wherever they find the quality and prices that suit them best for various uses.  A few thousand Metric tons  more or less I don’t think makes a difference to them as long as some country in the world has cargo to offer , weather the cargo comes from their own farm or from Latin America its not a big issue anymore as the trade now is much more organized.

2:- The Chinese imports

 2013                                      - 440,000 MT                     
 2014                                      - 570,000 MT
 2015(Mid June)                    - 430,000 MT

This means that they have good 6 months to cover the balance 140,000 + any shortfall they see in their crop + annual growth , which explains their slow buying pattern in the recent past. The carry over stocks are also fairly good for them to sustain till the end of the year where they can wait and watch the new African crop’s coming in and deciding to step in at the levels they feel comfortable from the origins that suits them best.

Similar numbers for Japan were also projected .
2013                                       - 140,000 MT           
2014                                       - 170,000 MT
2014( Mid June)                    -  95,000 MT (Approx )

Japan is also assumed to be fairly good on stocks and is not in a rush to enter the markets.

3:- Myanmar crop has always remained a mystery in terms of size and exports due to the border trade with China but rumors have it that their crop is also less than previous years due to heavy rainfall however those numbers are always debatable and its hard to predict what effect they will have on the global situation.

4:- African producing countries in East and West Africa all seems to have a good crop situation this year . Although only a few countries have had their sowing/harvest done so far the trend certainly points to a better crop in the coming season. There is no reason to believe that the sowing patterns will change due to softer prices as the sesame crop is now a fast selling product for the African farmers and still fetching them a fair price. Apart from some damage news from Sudan all other destinations should in my opinion have a similar or better crop than last year and there are carry over stocks in some countries as well.

5:- No confirmed news from South American destinations but the news says the prices there are soft as well with no rush or panic demand from anywhere.

6:- Coming to the Indian crop now.

    A:- Sowing is estimated to be 10-15% more than last year .This number is huge owing to the fact that it was actually less than normal last year due to a failed monsoon and in some cases total washout due to heavy flooding in certain areas.
A normal sowing area anyways gives us a huge crop but a 10-15% addition could result in what they say a “ Bumper Crop” .

    B:- Carry over stocks are not much , should be in the range of  25,000-30,000 MT max all areas put together . These are mostly the stocks with people who had stocked at high levels and are now stuck. The normal trend of stocking in India is that you invest say 20-25% of the money and get the balanced financed from the bankers when you stock the commodity in a warehouse. The prices for their stocks is now 25-30% lower and hence the stockiest are practically loosing on their entire deposit so all they can do it wait and play it slow hoping for a jump or at end they will just rotate their old stocks with new cargo and carry on.  That is why we are already seeing a disparity in prices with forwards being cheaper than the spot prices. The crop would have harvested early but some rains last week has pushed the arrival forward by a week or so, we expect tradable quantities to start arriving in various market yard by Mid of October.

   C:- Their was some issue with lesser rains in August and September and I do believe it may have stopped the “Bumper Crop” year from happening but a big crop non the less is surely on its way. The yields will be affected and crop size may reduce a little than expected but the quality should actually be better owing to lesser rain damaged crop. Once again hard to put a number on the crop that is still in the field but im assuming it should be atleast 15-20% more than last year. Everyone ofcourse has their own numbers for last year crop so you will have to do the maths.

Some Export Import Numbers :-

Year                                        Export
2010-11                                 - 398,441 MT 
2011-12                                 - 389,154 MT 
2012-13                                 - 299,482 MT
2013-14                                 - 257,443 MT
2014-15                                 - 375,656 MT

Year                                        Import
2010-11                                 -  8,727  MT
2011-12                                 -    609   MT
2012-13                                 - 38,050 MT
2013-14                                 - 72,928 MT
2014-15                                 - 34,767 MT

The last 2 years numbers are particularly very interesting for India , as you can see the export numbers have seen a steep increase in 2014-15 compared to the years before this even after India supposedly having a bad crop year. The import numbers have also seen a significant rise. India imported almost 100,000 MT that means we were almost among the top 5 worldwide importer along with the top exporting country.

India contributes roughly 30,000 Mt to the Korean Imports through the tender and we all know what big noise we Indian’s make about it. We actually imported more than what we contributed to the Korean Tender. With a huge crop expected this year it is highly unlikely India will be a importing destination this season , atleast not in a big way as some imports coming into India are based on customer requirement for African Hulled Seed which is being catered by some Huller's in India.
This means the African's will have a little more quantity in hand to sell elsewhere as India moves out of the importing equation.

Anyways I think the world market does’nt really move the way we in India think it does.
Last year we had a smaller crop and the volumes increased but markets still went down , 
the years before we had bigger crop yet the volumes decresead  but still the prices went up.

I guess the market movement is not really determined by what and how much you have to sell, its dependent more on when and how much the others want to buy. Buyer's market in simple words despite whatever we may think.

China having a short crop is no guarantee of markets moving up and similarly India having a huge crop is not a surety of prices going down. 

Markets we believe have already been discounted to a huge extent already in anticipation and in relation to all the above factors and more. The Currency movement being one of them.
We may still be a little off the bottom as the actual crop pressure is still to be seen and the buying/Stocking pattern worldwide still to unfold but with so much already factored in another steep fall from here looks remote now. Then there is always the Edible oil parity question , any oilseed getting cheaper weighs down on the mixing and blending for support and with the current prices of sesame it is almost at par or even lower than a few oilseeds already. 

There will surely be a great buying window for people who keep a watch on the market and then a rally back upwards for stability and parity with the global demand supply.We've seen a steady growth even when prices touched USD 3000 PMT and there is no reason to believe that demand or consumption will slow down at sub $2000 levels. The breach of $2000 /PMT for Hulled Sesame was really something i did not see coming so soon but it happened partly because of the currency changes and the huge supplies coming in from Africa. Looking at the world Import/Export numbers there seems to be no fall in consumption just change in buying destination and addition of newer suppling countries. 

My conclusion for the new crop once again would be to buy and sell at all levels rather than waiting for the bottom or peak’s. The policy of most buyers in the recent past had been spot buying and selling and looking at the market volatility and the economic conditions worldwide we believe its still the safest way to deal in commodities.  

The norms worldwide for food are becoming stricter by the day and I see no respite from this in the coming future , there are a lot of people in the trade who probably do not know anything beyond Sesame Seed , USD ????? CNF ?????.
They are least bothered or aware about what they are selling or even buying in some cases. Food Safety is here to stay. The more we interact as buyers/sellers the better it is for everyone involved.

 “Garbage In Garbage Out”

 I had pointed out a couple of years ago the birth of Double skin Bengal Hulled Sesame Seed and other varieties of Pearly White Chemically Bleached Hulled Sesame Seed made from Brown sesame etc and im sure a lot of the clients who fell for those varieties learnt a expensive lesson. Thankfully the markets got aware and with a bigger crop this year I am hopeful that such varieties will find fewer takers.

Saturday, August 15, 2015

Goma Sesame. Sesamum indicum. ゴマ、胡麻。

Sesame is an annual, flowering plant which is cultivated for its seeds, which grow in pods. Sesame has been long known to mankind as an oilseed: it was first cultivated about 5,000 years ago in Egypt and the Sahara area. It was already know in Japan in the middle or later Jomon-period (2,500-300 BCE) and there are records of its cultivation for lamp oil in the Nara-period (710-784). In the ensuing Heian-period (794-1185) it was also used for medicinal purposes.

Nowadays, 99.9% of all sesame used in Japan is imported. Only a small amount is produced on Kikaijima, one of the Amami Islands belonging to Kagoshima prefecture. The highest production of sesame comes from Burma, India and China.

Sesame has a nutty flavor and is rich in oil. It comes in three forms: white, black and golden (this last one is said to have the best aroma, but is not readily available). White sesame seeds contain more oil than black ones, but black sesame has a somewhat stronger, nuttier flavor.

Sesame seeds are sold in four forms: (1) untoasted, (2) toasted, (3) toasted and roughly ground as well as (4) toasted and ground into a smooth paste.

One can toast sesame seeds oneself by heating a dry frying pan over low to medium heat, then put in the seeds and toast them in 1-2 minutes. Shake the pan occasionally so that all the seeds get heated through. Be careful not to overroast the sesame.

For grinding, in Japan a suribachi is used, a bowl-shaped ceramic mortar which has small grooves on the inside. For the grinding, a wooden pestle (surikogi) is necessary, so that the bowl is not damaged. Grind the seeds until they are flaky and aromatic. Ground sesame is only good fresh, so use it soon after grinding.

Goma (sesame seed) with mortar (suribachi) and pestle (surikogi)
[Sesame seeds (goma) with mortar (suribachi) and wooden pestle (surikogi)]

Sesame is used in Japan in the following ways:
  • Toasted but not ground (irigoma): black sesame seeds are sprinkled over rice or other dishes to add a color accent (furikake). Sesame seed is also an important ingredient in prepackaged furikake. Both black and white sesame seeds can be used on the outside of uramaki (inside-outside rolls, like the California roll).
  • Toasted and ground sesame is called surigoma in Japanese. Used in many recipes in the Japanese cuisine, starting with adding it to shira-ae (cooked vegetables dressed with tofu). As on the picture above, surigoma can also be used in the sauce for tonkatsu.
  • Sesame dressing (gomadare) is one of the most popular dressings for salads in Japan and can be found in all supermarkets.
  • Sesame paste (nerigoma) is also sold in supermarkets and can be used as a spread on bread, like peanut butter (but much more tasty!). 
  • Sesame oil (goma-abura). The best oil for cooking, thanks to its flavor, often blended as it is rather thick. It is indispensable in the oil mixture used for deep-frying tempura.
Sesame is high in proteins and since olden times, various health benefits have been ascribed to it.

"Goma" has also found its way into general culture. As grinding sesame seeds in a suribachi is hard work, the expression "goma-suri" was born to indicate "flattery," especially flattery of one's superior.

Sunday, August 9, 2015

BRC and IFS Certification for Hulled Sesame Seed

We are proud to share our BRC and IFS Certificates with everyone who cares and knows the importance of these in the food Industry.

However I must add that working tirelessly over the past 1 year to achieve the status 
we learnt a very important lesson, 
" Certification is not always a Guarantee of Quality its just a commitment for Improvement"

We are now the first and only Factory in India to have both BRC and IFS certification done together for Exclusive Hulling and Export of Hulled Sesame Seed from India , being in existence since 1996 it was a tough challenge for us to get our old Infrastructure in line with the very stringent bylaws and conditions of the certification body but with a total commitment and resolve we finally did manage to overcome the odds. 

We graciously Thank all our esteemed buyers who believed in us for all these years and stood by us in good times and bad and without whom this level would not have been possible. We promise to keep working harder in serving you with utmost integrity and honesty in the coming future and in return all we expect is your invaluable and indispensable oversight and experince towards betterment .

For those would would like to have their Supplier Questionnaire's updated and filled and if you need soft copies of the certificates and other documents please feel free to email me on It would be our pleasure to provide you with all the information.

We are participating in ANUGA , Cologne, Germany between 10-14th October 2015. 

We kindly request you to visit and grace us at our Booth no. F-036, Hall No. 11.3 , India Pavilion.

Wednesday, July 16, 2014

Sesame Seed Monsoon/New Crop July 16th 2014

Hi Everyone,

Been a long time since I updated the post , actually there was nothing much to write anyways. Everyone had their own idea's of the Market and without numbers in hand it made little sense to counter the predictions/Guesstimates and view of the market.

Lets first look at some of the things that have happened in the past few months.

1:- Summer crop in Gujrat came out and although everyone put out numbers in excess of 150,000 MT , the official survey reports pegged it at around 115,000 MT.

2:-  The hulling industry saw the birth of another quality this year from Double Skin Bengal Brown Sesame seed. I had my apprihensions about the quality and I continue to do so. Thankfully people are now atleast offering it a different grade altogether so that buyer's now have a choice weather to buy cheap chemical laden product or opt for the Premium Product. The price difference is almost $200-$300 PMT so you need to be careful what you buy and from whom you buy.

If you buy the cheaper grade at cheaper quality knowingly its perfectly fine and a personal decision but incase someone sends you the cheaper quality at a slightly discounted price compared to the Premium it means instead of saving $100 PMT you probably lost $200 and now you work with the risk of selling substandard quality to your premium grade buyer's.

The Brown Sesame Grade is here to stay so everyone needs to be extra careful from now on.

3:- The stock levels as rightly predicted have touched a all time low , Stocks in the states of UP, MP and Rajasthan have almost finished. Atleast for UP and MP I can predict with utmost confidence that they might not have more than 5000 MT put together and even this is a exaggerated number.
I wouldn't be wrong in saying that the only reason buyer's have been able to buy from India and India has been able to export Sesame is because of Gujrat Summer crop from Mid May onwards.

Now to some numbers

1:- Gujarat Summer Crop :-
Arrivals started around 15th May,Peak arrivals around 25th May and Dipped again around 25th June. Peak Arrivals average around 25,000 Bags/Day or about 2000 MT/Day.
Slow Arrival Average around   8,000 Bags/Day or about   600 MT/Day
      Peak Arrival Days :- 30 , Slow Arrival Days :- 30

Total Quantity = (30 X 2000MT) + (30 X 600MT) = 78,000 MT. This number might still be off by 10% so lets assume we've had a crop close to 90,000. Even though I never put a number our regular clients will know that we never estimated the crop to be above 100,000 Mt .

Some people might argue there were days with 35,000 Bags/Day arrival as well , so to factor in the odd days I have taken a average without considering the holidays or carry over sales of the day.

2:- Indian Sesame Seed Export Import Data for the past 2 years
1.120740SEASAMUM SEEDS MT299,482.29257,443.09-14.04
2 .120740SEASAMUM SEEDS  MT398,441.17389,154.01-2.33
1.120740SEASAMUM SEEDS MT38,050.4572,928.0991.66    
2120740SEASAMUM SEEDS MT8,727.92609.28-93.02

Interesting number's these. You will notice in the past 4 years the Exports from India have dipped by almost 140,000 MT but the Imports have risen by almost 70,000 MT.

India cannot import Sesame for domestic consumption so all that we are importing we are re-exporting.
Its a similar pattern to what China had till it became a net Importer. The domestic consumption in India is rising and the buyer's here are willing to pay a better price as well with less headache and faster payment terms. The African markets have opened up for everyone in the trade and India I believe is one of the biggest buyer from Africa now , weather they import the seeds into India or get them exported directly to various destinations is another story.

Current Situation and Future Predictions :-

1 :- Anyone thinking that the stockiest in India are sitting on huge loads of stocks in their warehouses is in for a big shock in the coming months. The stock situation is at a all time low in every sesame producing area and whatever little there is left should only be enough for India to sustain its export demand for the next 3 month until the new crop arrives.

2:- The monsoon is really weak in India and with almost 40% less rainfall the situation looks unlikely that it will improve. The late rains means that sowing in most areas has not even started now.
Going by the data available online

 "In oilseeds in particular, there has been 83 per cent drop as of last week July vis-a-vis July last year in terms of the area under sowing. "

"Sowing of most kharif crops barring paddy is significantly lower than the corresponding area last year. According to agriculture ministry data, a total of 25.6 million hectare area has been down as on July 12, half of the corresponding area of 51.76 million hectare sown in the corresponding period last year. Most affected is the sowing of crops like pulses, coarse cereals, oilseeds and cotton"

 "As on July 15, cotton sowing is done on 10.19 lakh hectares against normal of 27.17 lakh hectares, while groundnut sowing is 5.41 lakh hectares against normal 14.39 lakh hectares in the state. Total area under cultivation in the state is 11.25 lakh hectares as against the normal 26 lakh hectares."

"It would be a blind bet for the cash crops because rains are uncertain and the crop may fail. In this situation at least the farmers have to save their cattle by making adequate fodder available.The present rainfall is insufficient for sowing of cash crops because it would require more moisture in the soil. But with such rains, fodder is an option for farmers to survive their cattle"

Even if we assume that these estimates are wrong we can safely say that the sowing will be short and even if the rains come today and sowing starts tomm , which i don't think will happen anyways looking at the rainfall situation the sowing area is unlikely to be anywhere near what it was in the previous years. Even if the sowing finish by End July , the new crop will not be available before November now and that means for the next 3 months India will absolutely finish every last kilo of Sesame stock and might go into African markets aggressively to shop around , taking the global prices higher and higher till they can be cooled down by the new crop.

3:- The new crop predictions should start as usual in September-Early October and any bad news can create further panic , we also have to keep in mind that even that little new crop will be on the mercy of the rains , we have seen in the past few years what damage the last few weeks of rains can do to sesame seed crops.

4:- The festival season and Winter demand for the domestic markets in India should also start around Mid October and with no new crop in sight the old stocks will quickly be diverted to the domestic market where they fetch a better price. 

5:- I am not implying in anyway that the buyers need to stock their warehouses today in anticipation of price rise , there still are many factors which can cool down price

a:- Good crop in China and Myanmar , this will divert all the Chinese and to an extent the South Asian 
     Oil based demand.
b:- Drop in demand , again I say demand and not consumption. If on the shelf it will sell.
c:- A huge crop in India in a range of 250,000 -300,000 Mt.
d:- A normal to huge crop in Africa
e:- Currency factor is always there

Looking at all the factors above we believe there might be another bullish year ahead , atleast till December when African markets will once again determine the fate of prices for the next few months.
However with global prices available to everyone on real time basis atleast "WE" would not be naive enough to think that Africans would sell their cargo at throw away prices when they know for sure that no one else can fill in the global supply gap. With carry over stocks worldwide at all time low chances are we would continue to move hand to mouth basis for the next season as well.

Looking at the global scenario my suggestion once again to the buyer's who like to do business on a long term basis is to get into collaborations with actual Manufacturer Exporters rather than relying on fly by the night new suppliers and brokers. You might get lucky with small trader's once or twice but for a larger picture you do not even realize that slowly you are getting sidelined in the business and someone else is taking up that space. The only way to move forward in this global economy is to have a stable and reliable supplier base.

Switching to inferior quality in tough times might look like the best option initially but by the time the world spins around again you would find yourself on the wrong planet altogether.

Tough choice but thats what life is all about.

Tuesday, March 11, 2014

Sesame Seed Gujrat Summer Crop Prediction

Hi Everyone,

Since our last report in Jan the markets have been more or less rangebound as we thought they would.

Nothing much happening in the market except the gossips and predictions of a super Summer Crop in Gujrat . It seems like everyone expects the seeds to pour out of the farms onto the streets and a total crash in prices . We'll to be frank we don't really see that happening.

Lets look at a few reasons why we think so.

1:- The stocks in India are at really really low levels , its a fact I doubt anyone would deny now.

2:- Stocks at destinations are at a hand to mouth situation as well , I doubt there are buyers sitting on huge unsold stocks anywhere in the world.

3:- African cargo is practically over and they will not harvest till Early November in a big way.

4:- A new crop or a big new crop is not a unknown phenomenon . We have a new crop every year in every sesame growing region. Its much bigger in size than what we expect the summer crop to be and still prices do not fall let alone crash every time. Ofcourse a  new crop can start with a correction of 10-15% but how long that correction stays depends on so many factors which need to be looked at.

5:- With predictions numbers of 100,000-150,000 and even 200,000 coming out for summer crop I think most people have now forgotten what the average summer crop size actually is. So now even if we have a crop of say 80,000 MT everyone in the market will say its a small crop because the comparison parameters have been set to artificially high levels.

6:- While I was in Gulfood talking to a few friends everyone there predicted a super crop for chickpeas as well and within 3 weeks time the rains have practically turned the tables. Didn't the same happen to the sesame crop's in India over the past few seasons.

7:- Everyone says farmers would grow more sesame because the prices are high , but fail to acknowledge the fact that sesame is a low yield crop as well. So a farmer growing sesame today doesn't really make a killing compared to the other crops he can do as well. However going by the same logic the question remains that will the farmer who has seen his crops getting washed out for the past 2 seasons and lived in misery will dare to do sesame seed again if the Indian government predicts another good monsoon.The fact is that a good monsoon in India means that you can have a good crop of practically any commodity except Sesame.

Here are a few articles for you to go through to understand that with the unpredictable world weather how difficult it really is to predict a good or bad crop even after its been sown , let alone predicting a crop size even before the sowing started. Still have a good 2 months before new summer crop arrives and will be interesting to see how many Astrologer's who predicted a bumper crop revise their estimates in the meantime and get their clients into deeper troubles.

The USD has started playing games as well just like we expected it to in Election Year. The USD has moved to 60.80 levels from nearly 63 levels a few months ago which is like a 3-4% appritiation.

Monday, January 20, 2014

Market Report Sesame Seed 20th Jan 2014

Hello Everyone,

Hope everyone had a great start to the New Year and we wish everyone a lot of Happiness , Joy and Prosperity.

Sesame Seed market over the past few months since our last report has moved along just as we predicted. The Hulled Sesame Seed Price jumped to an all time high of around $3200-3250 FOB levels and have since then settled down at around $2850-$2900 FOB levels.

What has indeed happened is the arrival of sub-standard qualities in the market which are trading at much lower levels but frankly speaking I personally wouldn't recommend anyone to eat that. In my 14 yrs in business its very rare that I have ever tried to ridicule or snub a competitor , what others do is none of my concern but when it comes to Sesame Seed laced with Chemical's , bleach and various whitening agents I think its my duty to make people at least aware about it. I never understood this fascination of pearly white color in the seeds anyways.

The cheaper variety or "Hulled Sesame Seed from Brown" as they call it, is being made from crushing grade Brown sesame ,just the brown/black/Red etc mix kinds was still acceptable but this year they are trying to hull the double skinned sesame , mainly found in West Bengal region of India, the worse kinds that is available, even the oil made from these seeds is considered lower grade and for direct consumption its almost as good as slow poison. As of now the food authorities around the world are not checking for chemical adulteration in Hulled Sesame but I am sure some day they will and then a lot of people will loose a lot of money in claims and God forbid will land up in jails for mis-declarations.

You can ask your respective suppliers more about it , just ask which raw material is being used for the Hulled that they are supplying to you and for once just ask them if its chemical and bleach free,  you will be surprised how quickly the price offered will change. Its a dirty game being played in India so just be careful. I can understand if the price difference is 50-60$ PMT for a Hulled Sesame Quality , but a difference of $200-$300 raises suspicion. Something has to be wrong somewhere.

Moving onto better things , the Sesame Market overall.

Current Situation :-

1:- The markets are almost stable on a day to day basis over the past few weeks now. The arrivals have virtually stopped and the demand remains sluggish with mostly spot business being done.

2:- The stocks are definitely not huge , contrary to what many people think that there really is a lot of stocks hidden somewhere and one day the flood gates will open and all the sellers will come out with truck loads and markets will crash 20-30% overnight. I really doubt that. Being a manufacturer I have never really seen a situation as we see now. To buy 100 Mt a day in Jan is a big deal today , whereas in past we could collect a 1000 mt over the phone.

3:- The Korean's tried to play smart and announced a tender excluding their traditional suppliers ie. India, Pakistan , Sudan and Ethiopia. They thought the smaller countries should be brought into the picture to expand the supplier base , it did work but surely not the way they probably thought it would, the prices they got around $2550-$2600 was not really a huge bargain.

4:- Africa was the only reason we believed that could have brought the prices down, it did to a certain extent but once again our predictions from the past held true. Sesame is no longer a sub $2000 commodity. Unless something really drastic happens i doubt the Natural 99/1 grade can trade below $2000 levels this season i.e till next new crop in Oct 2014.

5:- Talking about the dip in demand and exports , a lot you will be surprised to know that the export numbers from India from Oct- Dec are only marginally down. If I have the correct numbers the total export from India for Oct-Dec stands at around 53,000 MT . That is rougly about 18,000 Mt per month.

6:- The sudden correction in prices have forced virtually everyone to get rid of the excess stocks. The exporters , bigger stockiest have all gone into profit booking mode since mid Dec and I believe by mid of Feb we should once again see hand to mouth buying from everyone. Even with so little buying by exporters and bigger stockiest the prices at farm/market levels remain firm and high showing that there really is lack of supply and bullish under current.

7:- People talked about heavy imports from Africa into India , but fail to realize that unlike last year the average Import prices are around 2000-2100 $ PMT . Average cost to bring the imported cargo to the factory is around $100 PMT . So with a landed price of  $2100 PMT and taking a good yield of say 80% we get $2625 just the cost of seeds. You need to add the manufacturing cost + packing + export charges + interest cost etc, all of which will cost nothing less than $200 PMT. So the mean average that we predicted in the start of the season around 2800-2850 stands justified.

Unless someone can point out where the raw material is cheaper than $2000 PMT on a consistent supply basis  , I see no reason for a huge slump in prices in India.

What can happen over the next few months :-

1:-  News of smaller new crops ( Mid Season) are coming in from Gujrat. I think these are the one's where the farmers did resowing after the late damages. I would put these to be in the range of around 2000Mt to 3000 MT on time to time basis. People say these could pull the markets down but I believe they are more likely to keep the market steady.

2:- Gujrat summer crop. Phewww  some people are already talking about summer crop being huge , bumper , ultra super in the range of  100,000 Mt.  Well all I can say to such rumors is good luck Mr Nostradamus . Last time Gujrat produced a 100,000 Mt was a decade ago and even that was a regular crop. The sowing has not started yet , we don't know what the weather is likely to be in the coming months so predicting a crop size just on the basis of high prices right now is like predicting floods after a thunderstorm. Yes it might rain cats and dogs , but then maybe it just drizzles , who knows :). The crop comes out around Mid May-June so we still have time , the sowing will start end Feb-Early march and hopefully we should start getting some size estimates by Mid April.

3:- Korean Tenders will continue to come in from time to time and will keep determining the bench mark prices across the world. Tenders are likely to be smaller in lot size as we have noticed from the past few tenders but i believe the overall quantity on a yearly basis should be same.

4:- If the prices from Africa and India remain stable i foresee a renewed demand coming back as i have a feeling the buyer's have almost got used to or comfortable at current levels and there is no need to panic anymore.

No big crops expected globally for the next 6-7 months , the next big crop will be China in September and till then it will be bits and pieces crops in various african destinations which certains cannot cater to every market segment on a regular basis.

Overall our predictions for the next few months atleast till the next summer crop arrives is that market would remain firm and rangebound. At higher levels the buyer's will slow down and at lower levels there will not be enough sellers. So once again for Hulled a Range for $2800-$2900 remains a good and safe bet to be active in the market.

We also need to watch the US$ carefully , thankfully for the past 3 months it has been stable and moving in the range of 2-3% both ways but with Elections in India just around the corner ( Expected to happen in April-May) the economic situation could turn either ways and from the little information that we've got it can get very volatile during that period.

For people who were worried about the consumption drop in Sesame seed , I found a few interesting articles on the Internet about the growth on hummus ( its 50% Sesame Paste i.e Tahina) .

Friday, November 8, 2013

Sesame Seed Market Report 8th Nov 2013

Hello Everyone,

So finally the wolf has arrived. All these years we've had the same stories from India about short crop , no raw material , no carry over stocks but this year it looks like the story is finally true.

Ohh...My God , Are you guys Crazy...etc etc , some of the very common phrases we have been hearing everytime over the past few weeks and to a certain extent I agree with the clients that Indians have indeed gone crazy. Yes the markets are short but the kind of daily/weekly movement we have seen in the recent past are just plain crazy.

Like I have been saying for the last few months that the market remains bullish despite the prices which fell periodically from time to time , the reason being more currency driven rather than an excess supply or a lack of demand.

Let us look what happened first :-

1:- We all knew that India had a good monsoon but we failed to recognize the fact that a good monsoon   does not always mean a good crop specially when the crop is sesame . I had specifically mentioned this point in my september report before the crop even arrived.

2:- Carry over stocks were depleting quickly and we thought we can live without them as soon as the new crop would come in.

3:- The currency movements were so sharp in the past few months that it made the markets almost directionless .Everyone was playing more with the currency rather than the actual commodity prices.

Current Situation :-

1:- Despite the initial losses due to heavy rains in India and the losses in the northern states of UP/MP the growth figures coming from Rajastan and Gujrat made everyone believe that the overall numbers of total crop would be more or less same as last year , however the late rains changed all that.

2:- The numbers put forward by various agencies/associations/trade estimates say the total crop is around 200,000 - 220,000 Mt. I would say these numbers are more or less correct looking at the average arrivals in the local markets over the past 30 days.

3:- I have no doubts that the export numbers from India will fall dramatically this year however from now until October 2014 the majority of global Hulled Sesame demand will still have to catered by India which means we will still easily export about 200,000 MT in the coming 10 months.

4:- Korean Tenders have shown an affinity towards the Indian suppliers and even the last tender was a testimonial of the fact that a major share of the Korean Tender will still be catered by India despite the high prices here. In a previous report I have explained how the complications with documents , the finances involved , the complicated Bid bonds etc ,the consistency in Quality and transit/delivery period all put together give an advantage to India for the Tenders.

5:- Last year we had carry over stocks at the start of the season , Indian's entered African market early and got some really really nice bargains for Importing the sesame into india which helped keep the market under control , this year however the Africans are in no mood to sell cheap to India. With prices already very high the risk factor has gone up so much that the handful of people who really do Import and reexport from India are also in a wait zone.

6:- The supply continues to remain weak  , the quality coming into the markets is 90% rain damage which means although it can be used for hulling the yields will be much lower compared to previous years which would mean higher pricing for Hulled. Sometimes for the factories it takes a little longer to realize the losses/cost increase due to yields and lower sales but I am sure eventually everyone will realize these finer points and costings for hulling units will have to be revised.

7:- The 99/1 grade is in very very short supply , the arrival overall are not even 100 mt /day for good quality which means that the prices for good quality Natural are almost at par with those of low quality hulled.

8:- At the moment there are only 3 kinds of buyers in the market
     a:- Exporters who sold forward and are short.

     b:- Buyer's who sold forward and did not cover.

     c:- Domestic demand which despite high prices is very strong atleast till dec.

    So even though a lot of buyers who say they have enough in their books and are well covered for the next few months  have not been covering more at higher levels , I am afraid suddenly everyone will realize their warehouses are empty and will jump back into the market at high levels asking for spot shipments creating a bigger ripple than there already is.

What can happen over the next few months :-

1:- Diwali festival is over , everyone in India waiting in anticipation that the arrivals will increase after diwali and a correction will happen. I have a feeling it might be correct, however we have time and again told our buyer that the window will be very small . Anyone waiting to catch the bottom might just miss the train altogether.

2:- If the arrivals do pick up we might see a correction of about 5-6 % , I am not expecting a big fall right away as the supply chain is still empty. A supply based bullishness can only be countered by excess supply and unfortunately we do not see any big supplies coming in and pulling the markets down.

3:- If the arrivals do not pick up everyone should be ready to pay a further premium of about 10% . We are already at all time high levels in terms on pricing in Indian rupee but there is always scope of some further upward movement.

4:- I remember a few yrs ago when Hulled Sesame crossed Rs 100 everyone said its just not sustainable and prices will crash , I explained the phenomenon in a previous report about new market benchmarks which are bound to happen every few yrs , I guess the next target would be Rs 200 , I doubt that atleast for this year it will be breached or can be sustained even if we do manage to touch it but I am sure that the current prices are fair  enough to be workable over the new few months.

5:- Africa as we all know holds the key to the markets , if the big boys there start manipulating the markets , which is very much possible looking at the global situation right now we are in for a tough year ahead.

6: -The news from Africa is not very promising either , none of the destinations are reported to have a bumper crop , at least not to the extent that they can cover the losses in number's we've had in India and China. BTW China crop was reported short as well and by estimates is only around 250,000 Mt.

Ofcourse the demand will fall this year and maybe to a certain extent some institutional buying from big bakers and confectionary makers will be less. However like in the past we still firmly believe that price is not a deterrent atleast for food products. A company may think that since their sales are down people are eating less , the fact in most case is just that one of your competitor is now cheaper or has ready cargo to offer and your buyer has merely shifted their demand to someone else to average out their costs and to sustain their demands because you didn't have enough to offer.

Some of my friends tell me..Ahh you can live without sesame , who's gonna pay such high prices.
But I tell them we can live without a lot of things we don't really need  yet people pay loads of money to eat them.

I do believe a good chunk of sesame application will be shifted towards other seeds but as the wheels turn everyone will notice that the retailers over a period of time have revised their prices and when prices of sesame do fall these people will make a killer profits as retail prices hardly ever get revised downwards and the one's who sat back will regret not being among them.But thats for long term , just a thought :)

I've heard numerous arguments of Africa emerging as a competitor and taking over the market share of India. The reports are absolutely 100% correct , did'nt India do the same taking over the market share of South America and china. The fact is we dont have enough seeds in India so naturally we are more expensive than Africa is at the moment . Africa also has the advantage of heavy export subsidies , currency valuations against USD and duty benefits in China but all these factors put together do not make a stable and a long term growth story. Its all about which country has a better and bigger crop , so atleast for the next few years the global markets cannot ignore the India story. Once India gets back its big crop that would be the time for a fair comparison.

As always our suggestions this year would be

1:- Stick to your reliable suppliers. A regular and old supplier is more likely to help you make a good average over long term rather than any flash supplier who is offering 4-5% cheaper right now.
I would not  suggest gambling away $60,000 for a $1000-1500 saving on a container.

2:- Stick to Quality , in short term switching to cheaper grade of sesame might look like a good decision but in longer run you risk loosing your potential clients when problems start and you unknowingly enter into a price war market where the competition is that much tougher. If you loose a business because a client wanted lower quality because it works for him there is a chance he will come back to you when he has problems or when he wants to move up in terms of quality segment but when a client moves away because he's looking for the cheapest price of the lowest quality where do you go.

Everyone in commodity market knows the china story , they captured every segment of business with cheaper prices but the party didn't last long. Would you today buy a cheap chinese product or a slightly expensive one made elsewhere ? BTW both sell , its just a matter of prospective.

3:- Like always please do not be tempted to catch the bottom , the best way forward is working on a average and atleast for hulled I would say an average price of USD 2800-2850 over the next few months should be a good buy this time. You might not get the volumes every-time so its important to be active in the markets at all levels and keep shopping/selling at all levels.

Sesame is no longer a cheap commodity and it sure is a very volatile one , in the next few years the competition is bound to get smaller because the smaller players will be pushed aside as the profit margins will be far less than the proportionate prices of investments and the risks involved , the one's who will survive will be the one's who stuck to the basics of business.
Right Quality - Right Price.

Once again we thank you for all the support and look forward to you comments.