Thursday, April 3, 2008
Wednesday, April 2, 2008
KOREA TENDER NEWS- SESAME SEEDS
INDIA – 300Mt at $2278 ,INDIA -300Mt at $2288 ,INDIA-500Mt at $2347 ,INDIA-300Mt at $2349,INDIA-1600mt at $2387,INDIA-500Mt at $2388,PAK-300Mt at $2385,PAK- 200Mt at $2389.
The African's were notably missing again showing the bottom line strength their stockiest and exporters are showing,also Chinese exporters which were seen enthusiastic during the last Korean tender were seen missing from action at these levels , indicating that their prices are still higher than India's at the moment.
The Govt of India announced some drastic steps to control price rises of food commodities in India , notably the reduction of duty to 0% on Edible oil imports , this could mean the edible oil seed industry can breath a sigh of relief for a little while as the govt will first try to acknowledge the impact of duty reduction , ofcourse with all International Oil prices on a high it might not have the impact that they foresee. They also imposed a ban on Non-basmati rice and that sends out a strong signal to the exporting community to curtail prices.Strict stocking quota will also be imposed to curtail hording which is leading to price rise. All these measures have given negative signals and we are already seeing reluctance from most exporters to enter into long terms contracts.
Its been a very quite last 2 weeks as usually happens in end March to Mid April but we are fast getting to a situation where all exporters are eager to ship out existing contracts first and clear their warehouses before getting into new contracts.We might see more back to back limited prompt shipments after April.We also believe that most people will have hurried their contracts and with god's help if there is no ban for this month will have cleared about 75% of their stocks. No one wants to step in the uncertain market at the moment and that would mean almost 70-80% of the hulling factories will take a shut down in or by end of May as the conversions have also eroded and demand slowed down.The brave few in the market will definitely pounce of that advantage and jack up the prices if and when the demand resumes.
As we discussed in our past reports that prices in the market are vastly varied and dependent on who has stocks at what levels and at what levels are they willing to clear those stocks out and that is the reason the buyers are probably seeing vastly different quotations from their various suppliers, this is also now evident from the Korean tender where the prices are actually lower than the current market prices.We believe if you are looking for a bargain April could be a very good month but buyers should be prepared to collect the cargo on prompt basis and stock the same at their warehouses rather than looking for long term contract which will carry a lot of risk for both suppliers and the buyers in the coming months.
We still believe that International market is bullish , its been 6 months since the supplies started , Chinese and Indian low level prices have been shipped and probably consumed by now , the African and Central American crops started late and that means their stocking happened at much higher levels and they would definitely like to make a profit of their stocks and will try to keep the prices high for as long as possible.Most buyers are now sitting on mid levels stocks and some high levels prices too as the business done on high levels was limited , that means that if prices fall more from current levels most buyers will stand to loose a lot of anticipated profit which is not a good sigh for trade. We are in a correction stage at the moment , April has always been a dull month for Sesame however with the "Lantern Festival" in China , the Olympics demand and ofcourse the much anticipated Ramadan buying could renew the demand and help take the prices back up. We have already touched the highs and there is no reason to believe that those levels will not be touched or breached once again. We saw huge panic and concern the buyers showed during the bull run clearly showing the demand undercurrent that remains.