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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.

http://timesofindia.indiatimes.com/city/rajkot/No-respite-from-rain-hailstorm-in-Saurashtra/articleshow/31773484.cms

http://timesofindia.indiatimes.com/business/india-business/Fears-of-El-Nino-on-rise-may-spell-woes-for-the-economy/articleshow/31824485.cms

http://www.hindustantimes.com/india-news/storms-batter-half-of-india-damage-farms-and-crops/article1-1193410.aspx

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) . 

http://www.theguardian.com/lifeandstyle/shortcuts/2013/aug/07/british-love-affair-with-hummus
http://www.huffingtonpost.com/2013/05/02/hummus-is-conquering-amer_n_3202411.html
http://en.wikipedia.org/wiki/Halva








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.

KEEPING IT REAL - KEEPING IT SIMPLE













Monday, September 30, 2013

Sesame Seed Market Report September 30th 2013


Hello Everyone,

Time for another New season. Buyer's are ready...seller's are ready and all we need is Sesame seed.

I am sure by now everyone has the reports from India , the enthu cutlets , Eager beaver's or plain simple aggressive players as we say must have been feeding everyone with day to day updates. Monsoon came in early , but like we said in the last reports the rains were far too much for a good sesame crop.

Ofcourse there are areas still which look really promising but overall numbers we believe should not be more than last year. The late rains in Gujarat and Rajasthan have further messed up the sentiments and only when the actual new crop comes in the market and the volumes will start to emerge will things cool down or flare up further if the numbers do not show in terms of arrival.

I'll just sum up my views for the current crops and try to look at the path forward this year. As posted in our last report in July we discussed some number's looking at the total exports and decline in volumes in India.

Last year despite a Bad crop we had carry over stocks and at the start of the African crop there was a really good window of buying at attractive levels which helped India sustain its Exports. I doubt that the same situation will be repeated this year.  The gap in Production Vs Exports in the last few years has virtually wiped off all the carry forward stocks this year.We could see a further dip in Exports from India this year.

We predicted in Oct last year that Sesame ( Hulled ) was no longer a sub $2000 commodity and have been bang on with that. So when we talk about prices moving this season we should forget what levels we had earlier , the new low benchmark is now $2000 and the high being about $2700 last year  ,we have a avg mean price of around $2300-2400 so the price volatility this year should be in the range of  +/- 30% from the mean average.

 The $/Rupee will be important to watch as its moving up/down by about 15-20% on a yearly average as well.

The domestic demand in India should also pick up by end of October as the festive reason and winters set in . Stockiest everyone believes will not enter into the market at high levels and that everyone would try to move hand to mouth.  Once again I doubt that , high level is just a number....when prices were @ $1000 the stockiest aimed at $1200 and now that they are $2000 they will aim @ $2200 . So its a phenomenon that everyone in business is already aware of , yes stocking will happen , yes speculation will continue , yes prices will rise and fall and yes people will still be eating Sesame @ $3000 .

Due to high prices the volatility index has gone up tremendously in the past few years , the up/Down's are no more for a few $ here and there...we now see price changing by $50-100 in a matter of few days so its even more difficult to predict the bottoms and highs. My suggestion as always would be not to wait to catch the market at the bottom but to be active in the market all the time and work on averages.

A reliable supplier will probably feed you at all levels and minimize all risks for himself and for you while the speculator will probably make loads of money selling to his buyer at the peak or lose a lot having committed at the bottom. Either case Bad Business I would say. With 2 FCL's now costing almost a $100,000 it needs a careful understanding and long term planning with their trusted suppliers  to sustain in this commodity for long term.

The actual picture should be clear in a few weeks time and by the time Anuga , Germany is over I believe the market will finally have a direction.

                                       We cordially invite you at our Booth no. G-031, Hall No. 11.3 in the India Pavilion.







Tuesday, July 30, 2013

Sesame Seed Market Report July 30th 2013


Hello Everyone,

Time again for the sowing season in India and for bulls/bears to come out with their own adventurous stories.

Sesame Market has been lackluster over the past few months with limited demand and slow international movement. The Ramadan demand did not create any ripples in the market as expected and the very strong $ has kept the prices low in international terms despite stable and high prices in local indian currency.

As we all know India imported huge quantities of sesame seed from Africa this year at the start of the season and that helped sustain the demand of factories here for the full season. The domestic crop  is more or less exhausted and with good 2-3 months to go before the real new crop actually arrives in the market I believe we will most likely finish everything even if things move at snail's pace.

1:- Why are the prices falling :-
      Everyone keeps asking the same question now, why are the prices falling when stocks are low ?

The first reason ofcourse if the USD which has fallen over 10% over the past few months , in commodity terms thats like a discount of USD 200-250 /PMT despite prices being same in domestic terms in India.

The second reason is slow buying from customers , I think with high levels very few take risk and have decided to go back to back on their purchase. Like i said before some people indicate that the consumption has dropped , again I never agreed with that fact. It's probably that people have low inventory rather than anything else . The overall numbers however tell a different story.

Export of Sesame Seed from India

                                    April 2012/March 2013                 April2011/March2012
       
Total (Qty/Mt)            299,517.50                                      389,153.50                      Less 89,636

Major Deviation country wise :-

Taiwan                         14970.00                                        24467.00                   (- 9497 )
China                             2807.00                                        11389.00                    (- 8582 )
Egypt                             8298.00                                        20402.00                     (-12104)
Turkey                         12610.00                                       16223.00                     (-3613)
UAE                              3730.00                                         6391.00                      (-2661)
Vietnam                       45664.00                                        89088.00                     (-43424)

Total                                                                                                                        Less 79,881

So the numbers actually say that 90% of the shortfall is due to 6 countries alone, barring UAE all the other 5 countries mostly buy Natrual so I am assuming their demand shifted to Africa because prices were low there. So i don't really see a pattern of consumption fall , its merely a shift to the cheapest source of supply which is a normal reaction in today's global scenario.

The third factor is ofcourse profit booking. Since the demand was slow and most exporters unwilling to take undue risk there was profit booking at every stage which kept the prices down. Everytime there was a jump there was someone in the market willing to sell at below market price based on his stock value rather than the prevailing prices which continues to confuse and pull the prices down.

Usually in a bear market i would be worried if its a supply based fall...however when the fall is demand based it usually means there are pockets of opportunity for both seller and buyers and the trends are very hard to predict.

Back to the Present :-

So what is actually happening with the new crop now. The views ofcourse differ from person to person. The monsoon has been early this year , but it has also been very strong. The sowing usually starts after we have the first few rain showers and the soil is well irrigated .

Talking to the local's the sowing has started in area's where they got a chance and is good in terms of size so far , some area's ofcourse are still waiting for the rains to stop. I am usually not flattered by the sowing number's because atleast for sesame seed they are irrelevant unless we have the perfect climate during harvest. A few days of rains during harvest can change the number game drastically as we have seen in the past.

Pls find below the rainfall chart for June-July and you will notice that the rains have been far far excess in all major sesame growing area's except for Rajasthan. However its still too early to say if that's good or bad. My gut feeling however say's that since sesame is so sensitive to water and with a good monsoon now confirmed the farmer's would be taking a lot of risk placing their bet's on sesame.

Ofcourse the traditional sesame farmer would continue to do it , but for new acreage to be added its a risk you have to keep in mind.

US$ will continue to remain volatile it seems and its movement can decide what levels we will see in the coming future. Overall I believe with low global stocks another failure or bumper crop in the coming season in India , China or Africa and turn the tide's either ways.

















Tuesday, April 30, 2013

Sesame Seed Markets After Korean Tender April 29th 2013



Hello Everyone,

It's been a quite 2 months in sesame seed markets , with prices staying mostly stable.
Korean tender was announced on the 26thApril and India got 4800MT while Africa took 1200MT. Interesting to note that for the Machine clean Premium Quality the whole quantity went to India.

 The question on everyone's mind now is that despite the Korean Tender going India's way why are the prices not rising , Infact they are falling a bit. I wouldn't say dropping because 4-5% change in prices on a week to week basis is very normal movement in commodities now.

My own observation in the recent times has been that just before the Korean Tender prices stay firm or rise in anticipation of something big but after the Tender is announced they tend to slip a bit. In some cases if India does not get the desired quantities its pretty obvious that prices will drop , however in cases where we do get a big chunk , like this time, prices still don't shoot up ,WHY?

Well I think its mostly because the shipper's get busy preparing the cargo for exports and stop or delay fresh buying unless they were short , which in this tender was not the case. Everyone had stocks and were clearing their cargo rather than speculating. However once you get everything packed , checked and cleared its pretty normal and obvious that they will come back for some more shopping.

With almost 5000 MT of Inventory cleared up from the market I would assume these players would surely come back to cover atleast 50% of this next month when the gujrat summer crop starts.

NUMBER GAME :- 

In my March report we had estimated Gujrat Summer crop to be around 30-40,000 Mt , but fresh estimates and reports put this number between 15-20,000 MT.

The stocks in india have gone down drastically. In case of Hulling industry I think only a few have raw material in excess of 300-400 Mt or just about a months Raw material. However there are still some stocks in Gujrat of the Imported cargo which is on offer to the highest bidders anytime. New Imports have practically stopped due to high prices in Africa.

As expected Africa would continue to wait till the Ramadan demand in June-July before any panic selling starts there and by that time it would have been too late for India to import anything owing to the
long transit times ( 45 days to 2 months)  and previous issues with quality and delivery from Africa.

Im my opinion we should almost exhaust all stocks and raw material by end of Aug-September even if the demand remains really slow and exports fall dramatically.

WHAT CAN HAPPEN :- 

Just as we mentioned in our last report , there have been jumps and then correction's thereafter in the past few month. All this of course have been because of profit bookings by almost every exporter.

I think this trend will continue in the months to follow till next new crop in September-October however what can change is that most of the people will exhaust their stocks pretty soon and close down. At this moment as well i assume almost 50% of the hulling factories have already taken a shut down and more will follow suit if the situation continues.

If the prices continue to remain high till season end and the next new crop is delayed or is bad we expect prices to stay firm for the next season as well. With complicated import rules and with a lot of financing involved the Import of Sesame seed is only limited to a few people in India and is not lucrative until unless the price gap is big enough. Importing for re-export also means a lot of speculation in terms of Quality , Delivery period and Price fluctuation which is never the basis of a good business model.

CONCLUSION :-

Overall i believe that there are some good bargains in the market available at the moment for people who wish to empty their stocks and move out however looking at the long terms picture from May till September period I do not see any big fall or corrections in the prices at the moment unless of course Africa comes out aggressively and drops its prices and some hidden stocks suddenly appear in the Indian market.

For Hulled and Sortex Clean Natural India still remains the preferential and logical destination and Africa will still have to work hard to catch with the Infrastructure and Technology available here.

Unlike in 2007 or like in other commodities prices of Sesame have remained Range bound over the past few months which is a good thing as the importers and their customers now have gotten used to the current price levels. For Hulled sesame the price of $2700 does not look unrealistic anymore and if the prices are corrected by a  few hundred $'s for a short time it would seems attractive enough for a lot of customers to cover their needs.

I would have been worried if the prices had shot up above the $3000 levels , where the pull back would have been very sharp and chances of loosing a lot of money were high. Overall I think its important to keep a watch on the markets for May-June period and cash in on any bargains for short term and it would be important for the importers to plan their demand-supply till End October because I doubt the new crop will be available in their warehouse anytime before that.

I never hesitate to tell a man that I am bullish or bearish. But I do not tell people to buy or sell any particular stock. In a bear market all stocks go down and in a bull market they go up.


Happy Summers Everyone :)