MARKET REPORT - APRIL 2nd , 2009

In continuation to my last report , prices have maintained their lateral movement in the past 2 months since our last reportof end January. Contrary to many people's thought of a market crash we thought that their were certain factors which provided stiff resistance at lower levels.

The prices did go up however do the same factors but the strong USD which traded in the range of about Rs 52.00 = 1USD in comparison to the Oct- Jan average of about Rs 49.00 =1 USD helped make the prices look that much cheaper.The USD in the past 2 weeks has weakened again and is now trading in the range of Rs 50-50.50 =1 USD which again makes the same prices as 2 weeks ago look 3-4 % expensive.

If February a small Korean tender helped move the prices up suddenly even though the bidding prices from India were below everyone's expectation. But once again the absence of competitive prices from Africa which is confirmed to have good big volume crop this year prompted everyone here that there was still scope of absorbing a $100-$200 rise in the international market.

China everyone said will not be buying this year and infact they bought very little since the season started in October,

but as we mentioned in our last report that China may be back for shopping after their major demand period of Chinese New Year got over. The strong buying spree from China in Feb got the prices moving up in Africa as well and after a certain level the demand stopped , clearly showing that the markets this year are very range bound.

Talking to a few of my Chinese colleagues , I learnt that the demand is slow but not down and out in the Sesame Oil business, ofcourse with high prices a certain segment of buyers have switched over but the fact remains that "Nothing is Permanent , not even CHANGE". People switch and then they switch back. A very interesting point as despite this talk of global slowdown and falling commodity prices , the prices of 90% of food items have still not been able to see the lows of late 2007 when this sudden and maddening rise of prices started.

We have all heard of low stocks in India for the last 5 months , low inventory , stocks in the hand of strong stockholders ,stocks at high levels are old topics now. The current buzz word in India nowadays is the Summer crop. I am sure their are all kind of figures already in the market about the size of the summer crop.I've heard estimated ranging from 50,000/Mt to our estimates of about 20,000 MT.

Working of some figures again. Considering that average yield per hectare in Gujarat for Sesame is about 400 Kgs/Hectare that means we need about 2.5 Hectare for 1 Mt of Sesame Seed. For a crop size of 50,000 Mt we would need a total area under cultivation of 2.5 X 50,000 = 125,000 Hectare. This figure looks a little unrealistic as compared to the normal sowing area under production in Gujarat which is about 350,000 Hectare.

Since there have been almost zero rains in Gujarat since Jan 2009 upto March 31st 2009 , some people may argue that summer crop is primarily sown in Irrigated lands with little or no dependence on Rainfall as in the case of normal season crop which is sown in June/July after the first monsoon rains in India.However being situated in a farm area we think we know a little more that people sitting in big cities that such a huge area in India to be cultivated by irrigation is close to impossible and that too for such a high risk and sensitive crop.

In our estimate the crop should be more or less similar in size to previous years with a little sustainable growth pattern and should be the range of 20,000- 25,000 MT. We must also recognize the fact that all of this is not for hulling. This crop will get divided into 3 parts

1:- 99/1 Premium Grade for Natural Export

2:- Hulling Quality

3:- Crushing Grade

Even if we take an average of what other say i.e about 50,000 Mt and our figures of 25,000 Mt , the crop will be around 35,000 Mt.

Lets say the Hulling grade in this is more 50% or about 20,000 Mt . Assuming that only 10 factories(Big small , Auto/Sundry put together ) will run for the next five months from May-September i.e about 150 days.Taking into consideration that the demand is down and there is a major slow down the factories are bound to run at about 60% capacity or lets say they will produce for only 100 days in the next coming 5 months.

10 Factories X 20 Mt Day X 100 Days = 20,000 MT . i.e they will need about 20% more in terms of raw material which means the 10 factories between them will consume about 24,000 Mt.

If less than 10 factories operate out of India , then doesn't that create a situation where the suppliers will have an upper hand in determining the prices and choosing the buyers anyways.If 10 or more factories run even at 60% capacity doesn't that account for this summer crop figure in total.In both cases we see a bottom line resistance being formed.

Where is the spare quantity to pressurize the market to crash? Its not that India needs to finish every last seed before the new crop as a compulsory rule or law.Every year we have carry forward , nothing new if we carry fwd 5-10,000 Mt.

Comparing previous years figures , India generally exports about 80,000 MT in the period April- September , last year i.e April 08- Sep-08 was about 107,000 Mt .Let me know If you need country wise import figures for this period of last 4 years.

Even if this year the April-September figures are down 50 % on low demand , we still would need about 50,000 Mt. We don't see a huge stock situation in India at the moment as even after the price rise in the past month the arrivals did not pick up , some people would say that the stockiest are awaiting for even better prices which may be true in some cases but what is also true is the fact that most stockiest have emptied their warehouse cutting their losses and gearing up for other new crops.After the sudden rise we even saw a 6-7% price correction but even then there was no panic selling by stockiest and no improvement in prices clearly showing that the supply is very very limited.

If all the overseas buyers are running in limited stocks and the demand has been slow over the past 6 months , I think the stockiest in India have been just as smart to realize that fact as well and there is no reason to assume that the stockiest will still hold on to huge stocks and loose their night sleep and money despite getting a chance to exit at breakeven or even at small profits in some cases over the last few weeks.

Some new origins in Africa and Central America will also be coming out with new crop in the coming 2 months but with the strong USD still trading above Rs 50 - 1 USD and at high prices worldwide the import parity and chances of India importing any more raw material is virtually zero. Hulled Sesame from India still remains the cheapest and limited.

Just as we anticipated a Chinese demand after their New year , we anticipate another buying spree from the Middle Eastern Countries and Turkey for their Ramadan demand which falls in August this year much before Indian new crop so all their demand will either be fulfilled by stocks in Africa or Indian Summer crop.

As per our estimates the markets should remain range bound in the next 5-6 months with strong resistance at price of $ 1650 PMT FOB on the lower side and $1850 PMT FOB on the upper side in case of Hulled Sesame. In case of Natural Sesame we see strong resistance at bottom levels of $1400 PMT FOB and $ 1550 PMT FOB.

However the USD still remains a major price determining factor and any downward movement from current highs will only make matters worse.

Sesame Seed Market Report Jan 27th 2009.

As most people would agree it has indeed been a very strange year for Sesame Seeds.2008 started with extreme bullishness and is strangely ended in the exact opposite note.However the troubled world economy and the weak sentiments has a large contribution to this as well.

Since our last report where we mentioned that there might be resistance at lower levels has proved right.We did touch the season's lowest and have bounced back as well. As we have been pointing since the start of the season the USD is playing a very prominent role this year.In Mid November the Rupee was trading at Rs.48- Rs 48.50 to a USD range , by the end of November/Early Dec it once again peaked to Rs 50.40 levels and continues to remain in the band of Rs 48-48.75 ever since.

From the last Korean Tender India bagged a sizeable quantity despite a huge price differential between the Indian and African prices. This clearly imply that price is not always the factor that determines the buying decisions and India should continue to keep that logistical and delivery advantage in future as well.Although it would be unfair on our part to say this but there is still a lot of insecurity and apprehension among a lot of buyers while buying from Africa due to their past record of defaults and quality.

In terms of Indian prospective even though the quantity was less but it still gave some support to the markets at lower levels and clearly implies the situation here.Although it is absolutely impossible to predict the exact crop quantities in India,Africa and China but since everyone in the trade including farmers, traders and exporters have now come to a conclusion that the total crop in India is at best between 200,000 MT to 210,000 MT.

However this year everyone is talking about Africa more than the Indian price's and rightly so.They have the biggest crop and in eventuality of a demand revival will be the only source which can cater to bulk quantities.The prices started coming out of Africa in November. Nigeria,Ethiopia and Sudan all started to quote really competitive prices and that literally confused the entire sesame trading community including the Indian exporters. At one stage the price difference in India and Africa was almost $400/Mt which prompted some Indian companies to look at the option of Importing the seeds from Africa.This situation however did not persist for long as the strong USD and steady price fall in Indian prices ultimately made the imports un-viable.

However there is confirmed news that India has bought about 5000 MT from Africa most of which was to cover their back to back sales.Turkey and China which last year bought huge quantities from India have done so from Africa this year and that is the reason the African prices have moved in a short band of $50-$100 over the past 3 month.

An interesting situation in India is that the Export is down by almost 50% YoY basis.If the USD and ocean freights were still at last years levels the prices would seem 20-25% i.e well above $2000 FOB PMT for Hulled.Why are the prices not falling then?Lets looks at some statistics here ( These are my assumptions based on conversations with friends in trade)

According to our estimates there are about 10 Big Hulling factories(Direct Exporters and Manufactures) in India having

a daily capacity of about 30 Mt/Day and an equal number of smaller factories which produce about 20 Mt/Day,these include the Sun Dry manufacturers and small manufactures who get cater to the trading community.Then there are about 15-20 factories which are very small and cater primarily to the domestic demand in India and operate for 3-4 months only ( Oct-Jan).

The new crop started to trickle in around the last week of September.That gives us about 120 days since the factories have started and for farm level arrivals in the local factories. My rough estimate would be that the factories operated for about 90 days in the past 4 months. That gives us the following.

Num of Factories X Daily Production X Working days since 1st Oct(New Crop) = Total Production

10 Factories X 30Mt/Day X 90 Production Days= 27,000 Mt ( 95 % Exported)

10 Factories X 20Mt/Day X 90 Production Days= 18,000 Mt ( 50 % Exported)

20 Factories X 10Mt/Day X 90 Production Days= 18,000 Mt (100 % Domestic)

Total = 63,000 Mt

To make 63,000 Mt the factories would have consumed an average 20% more Natural i.e about 75,000 MT.

On conservative estimates I would like to believe that there has been a trade of about 50,000 Mt of Natural as well including the Korean Tender supply, domestic consumption of the White 99/1 Grade and crushing quality seeds for Oil used in domestic market.

This almost tallies with the farm arrival figures in the domestic markets.

Avg Gujrat arrival about 5,000 Bags/Day

Avg Rajasthan arrival 10,000 Bags/Day

Avg U.P/M.P arrival 5000 Bags/Day

All India average arrival (all states and local markets put together ) = 20,000 Bags/Day

20,000 bags X 80 Kg/bag X 90 Days of arrival / 1000 =145,000 Mt Arrivals from farmers till date.

Based on estimates that the total crop is about 200,000 Mt it means we have about 60,000 Mt at max which has to come out from farmers or farm levels stockiest to work with for the next 7 months.

I'll assume that the summer crop which comes out in April/May in Gujrat will be about 20,000 Mt but their sowing will

depend on how the prices of Sesame seed are viz a viz Cotton and Groundnut.I think with groundnut that is relatively less Export dependent should also factor in the farmers choice of sowing.

Just as it is an open secret now that most Importers have long term open contracts and very rightly so since they assume that the markets will slide further but they will surely need to cover those at some point, however I would also like to believe that the stocking in India was relatively lesser than last year for 3 reasons

a:-) Prices did not fall to a certain level as anticipated which held back the stockiest

b:-) Farmers got in the merchandise in smaller lots

c:-) Financial crunch

To everyone's surprise the prices in Africa started going up at the same time when prices were falling in India.Other smaller origins such as Uganda,Senegal, Burkina Faso , Mali and Pakistan all have normal crops and their farmers like everywhere else feel a little cheated and are not ready to sell their cargo at low prices.As a trading community we all should understand that sesame is a low yield crop which fetches the farmer less than $400/Hectare ( Avg 400 Kg yield) in normal circumstances , this year it seems at no destination the farmers are willing to sell their cargo below the $1000/Mt benchmark levels.For them ofcourse this is still almost half of the levels they saw last year but

still a fair price for a commodity like sesame and that is the reason the farmers are reluctant to sell at anything lower.

In India the balance of trade remains very sensitively placed.I know that in the past the trading community has many times claimed that we might run out of crop at some stage which ofcourse never happened.This year too I doubt a situation like that is likely , not because we have enough but because the demand is down. Last year as well India barely had enough to cover the demand and the carry over stocks were limited and those too were left as the prices and demand fell at the end. We have time and again visited the farmers , traders and stockiest. The stocks are very limited and everyone by the end of Jan will probably get into a hand to mouth scene here as well. Any sudden demand therefore is likely to create pressure in the market , maybe that will not help in shooting the prices up but will surely be helpful in sustaining a specific price levels. The bullrun of USD against all currencies seems to be over and any fall in the USD against the Rupee will only strengthen the prices here in the long run.

Korea is estimated to still buy about 40,000 MT in the next 8 months on conservative consumption estimated.A portion of this is most likely to be supplied by India and even if this quantity goes to Africa it is more likely to support their price levels there and keep International prices within the current bandwidth.I have heard from my friends and colleagues in Africa that the arrival pressure is not picking up in Africa either. Sudan crop is being consumed quick and fast by Egypt and neighboring countries and is almost as expensive as India.Central American crop is not heard of to be any bigger than last year and with very high prices compared to Africa and India their crop is unlikely to create any sort of pressure in the International market this year. Turkey has still not entered the market but are likely to step in sometime soon as their domestic stocks deplete.China should be back in the market after they do the bulk of their consumption during their New Year Holidays.

If only 10% of Chinese population i.e about 130 Million people each buy/consume just one bottle of 400 ml Sesame seed oil ( 1 Kg Sesame gives about 400 ml Oil ) during these 15 days holidays, how much sesame is consumed?You do the math's :-)

Also not to forget the every Chinese family would make or purchase sesame seed balls of "jin dui" during these days because as per tradition their round shape and golden color it denotes "Luck". I read about this at

http://dessertfirst.typepad.com/dessert_first/2007/02/chinese_year_of.html

Once again in no way are we trying to say that the market could sky rocket but our belief is that it may not crash either contrary to some market sentiments.I would still refrain from jumping in the market suddenly as that could spike up the prices to unsustainable levels which may not hold for long , but would advice slow and steady buying and refrain from speculations and open positions.

Sesame Seed Market Report 12th November 2008

First we would like to thank all the esteemed friends and guest whom we had the pleaure of meeting at SIAL , Paris.It was our pleasure and honor to have met you there and a great learning experience for us.

Markets as we expected and mentioned in our previous Market Report started going down after the intital covering pressure eased off and the arrivals picked up after diwali.News of a good African crop is spreading around and this time the Africans have priced themselves very competitively.

The markets in India have falled almost 12% in the past 2 weeks however a portion of this fall was negated by the corresponding fall in the USD against the Indian Rupee which had touched an all time peak of 1 USD = Rs 50.15 in the last week of Oct. The Rupee is currently trading in the range of Rs 48- Rs 48.75 to a USD. Hence a 5-6% of the fall was negated by the Ruppee- USD fluctuation.

In real terms the prices have fallen back to almost the lowest levels they touched this season. The arrivals which picked up after Diwali Holidays have once again dwindled back to same or even lower levels in certain regions. We see some resistance at current levels as the domestic consuption in India picks up pace as the winter starts to set in. With 100% of the crop now harvested ,talking to the farmers and taking into account the average arrivals over the past 30 days from various local markets ,we can assume that the total crop in India should be around 220,000 Mt -240,000 Mt this year.,which falls roughly in the range we assumed last month.Last year the total crop in India was estimated to be about 380,000 Mt.So we are clearly
short by about 150,000 Mt , in addition to the problem of poor quality.

The quality remains a major problem this year, with almost all destinations having major rain damaged seeds.This is creating a big confusion in the market, the price variation between the lowest and the highest quality is almost 12% in the domestic market. The lowest being sold as Hulling ( This is actually the crushing grade, which is rain damaged ) and the highest ofcourse the 99/1 grade.Thea ration of Hulling Grade and 99/1 Grade arrival in the market is 90:10 this
year where it traditionally is about 60:40.The lower grade although looking very attactive in terms of pricing is giving much less yield and more and more sorting rejections which is taking the costs up. In the factory its hard to factor in these cost immediately but we believe sooner or later everyone in the trade will realize this and we should see some benchmark levels being formed. Due to this huge variation in the domestic pricing we see the same for the export
market as well , where our friends and clients have told us that the price band in Hulled Sesamebeing offered from India is almost $100 at the moment.

In a way we did want the prices to come down to sustainable levels to see the demand coming back to India but taking into consideration the current financial crisis we have our doubts that the buying pressure would resume anytime soon, the volumes are certain to drop this year but that could also mean slow but sustained buying all year round this time.Liquidity pressure and global turmoil are bound to affect the sentiments worldwide.

The arrival pressure has fizzed out from India, no doubt that the farmers are stocking marterial anticipating a price hike and usually the farmers dont panic that easy to pump all their cargo in the market if the prices fall. They might hold on to their stocks for good 5-6 months and continue to get limited amount in the market as and when they are in need of some money. African crop is out as well with shipments already taking place from Nigeria.Nigerian quality which traditionally goes to Japan for crushing is being tried by the middle eastern countries for the reason of cheaper pricing. Ethiopia and Sudan are just slightly cheaper than India. With the information we have from Africa , we dont see their prices falling too much as they clearly know that India is not their price competitior anymore
this year.

We now have to wait and see how much more the prices have to fall before the demand resumes and brings stablity to the market. Overall a 5% fall from here would get us below the lowest levels of this new crop and that would mean that technically all the stockists will start to loose money assuming that they all bought at the lowest levels.I am sure there will be some resistance at those levels and keeping aside the few volatile ups and lows that we may have a very "Boring" stable levels all year round. Just as last year the prices could not have just kept going up the same holds true for prices going down too much.Once again its really really difficult to judge the bottom this year and as we always emphasize its exteremly important to have a good average and little but consistant business this year to sustain oneself.India we believe still remains in a strong position as far as Hulled Sesame is concerned and although we have heard about some quantities being served from Africa and Middle east they are of limited quantity and accessible to a limited few.

We fear that a lot of companies might close their Sesame operations this year , we already have news about a few companies trying to finish their existing orders and stocks and step away from the market.Actually its not the sesame that is selling this season, "Only relations are selling". Friends and clients are back to the most trusted suppliers , and with slow down in demand they see no reason to go fishing around and risking huge amount of their money on someone unknow. I think that will and should be the trend this season as business will be done mostly on back to back or hand to mouth basis.

It has been a year or uncertainity , we started the year 2008 with extreme bullishness and by the end of it everyone seems to be bearish. Sometimes I get the feeling that in India the sesame prices are somehow magically linked to the stock markets.

Sesame Seed Market Report 14th October 2008

As most of you must have been already updated by your respective suppliers about the Trade meeting that was held on 11th and 12th Oct in India.

Most of the eminent trade related people attended the conference which included the Exporters, Brokers and Local Suppliers . Everyone put forward their views about the crop size and quality. Our trade association also sent out survey teams to all Sesame producing states to give us all a first hand idea about the situation there.

As per our previous market report we estimated the crop size as follows

Origin Estimates Aug (Mts) Estimates in Sept (Mts)
U.P/MP 110,000 100,000
Rajasthan 110,000 100,000
Gujrat 70,000 70,000
Others 10,000 10,000
300,000 280,000

However at the trade the survey teams findings were as follows

Origin Estimates (Mts)

U.P/MP 85,000
Rajasthan 110,000

Gujrat 60,000
Others 10,000

265,000 Mt

However the traders and brokers from Rajasthan put forward their view that due to some late rains in Rajasthan at the time of harvesting there have been some damages and they estimate the quantity to be around 80,000 MT.Even the estimates in U.P and M.P were argued to be lower but not very significantly.

This gives us a range from 235,00 Mt to 265,000 Mt for the Indian crop.Everyone agrees that China has a better crop than last year and may not necessarily buy from India , unless the prices fall significantly here and even the African Crop looks very promising up and is estimated to be up by about 10% from last year.

All the crop is however delayed by 2-3 weeks in India due to the heavy rains at the time of harvesting and that means the arrival pressure is not building up at any destination.We also believe that although not many people have sold big quantities forward this year as buyers were reluctant to cover as well so early on , we have to take into prospective the collective sale that has happened over the last few weeks in anticipation of price fall by the Indian Exporters.The untimely Korean Tender's , last 2 of which combine to be a quantity of about 10,000 Mt is mostly open contracted and is yet to be covered along with numerous smaller contracts that our export fraternity has also sold without covering.

The arrivals that picked up in Gujarat and Rajasthan have been broadly stagnant and since in India we have Diwali holidays from 22nd Oct to 29th Oct there is a big rush to cover at all levels by exporters who need to fulfill their Oct-Early November shipments. The situation has been worsened by the rain damaged seeds which are estimated to be around 20-25% of the total crop this year.This quantity is totally unsuitable for exports and will get absorbed in the domestic oil crushing market in India.

Everyone at the meet also agreed that the demand will go down significantly this year due to the high prices and global financial turmoil which we believe is true as well.However with Indian export's touching 320,000 Mt figures last year even a drop 30% of global demand (Including Chinese demand which was about 60,000 Mt ) last year we still need to have about 200,000 Mt to export which is again the back to back situation we faced last year.

This should keep the prices firm atleast till African harvest starts in Nov End/December.The prices impact in the last few days may have surprised the buyers as the domestic prices have not really appreciates by that much as the FOB and CNF prices that the buyers may see reflecting on their respective current offers now as compared to 1-2 weeks ago. The problem here is that most sellers were offering prices in anticipation that the prices will fall , many not necessarily speculating but taking a calculated risk by estimating that prices may soften by 2-3 % as the arrivals pick up , however with that scenario gone now they now have to factor in not just the 2-3 % calculated risk but also the 4-5% price rise in the domestic market and the 2-3% fall in the USD. So suddenly the prices are 9-10% expensive although the price rise in Domestic market in India is only 4-5%.

As we assumed in our previous reports the fluctuation again this year should be in quantum's depending more on the USD and the market sentiments rather than actual prices as and when they are at a particular point of time. Also if by any "Bad Luck" the domestic demand of sesame seed in India which is traditionally very strong during the months of Nov end till Mid Jan remains strong as previous years we can easily see a consumption of about 50,000 Mt in the India which can further put pressure in the market.

Despite all the above we do not expect or want the prices to go up , we would rather see prices of sesame at a sustainable level with good volumes rather than very high prices and a major slow down in demand for the coming season as that can hurt any trade in the long term.Other destinations can easily substitute the Indian suppliers as far as Natural sesame is concerned but we still believe that India is still in a very strong position as far as Hulled Sesame seed is concerned. Last year we saw emergence of certain new destination for Hulled but those were mostly because of the crazy price escalation which gave them a window to match or even sell at lower prices than India at certain point of time as they managed to cover the raw material early on low prices.However that may not be the case this year as prices have started on a high and strengthened from those levels without touching the bottom.

This sudden price rise has caught most of the exporters and importers by surprise as everyone expected the prices to fall atleast for a short period which did not happen, everyone hopes here that once the covering buying is over for the Korean tender and short covering we may see prices slide again after Diwali i.e End Oct/Early Nov which should them open a window to cover again.We see another opening around End Jan after the African Crop and slowdown in Indian domestic demand.

Once again we emphasize that it would be very difficult to judge the bottom this year and most trade will have to be done based on a better average.

SIAL , PARIS 2008

We cordially invite you to visit our Stand in SIAL ,Paris 19th-23rd Oct at the India Pavilion , Hall 4.

It will be our honor and pleasure to have your presence at our stall.

We look forward to seeing you in Paris.

MARKET REPORT SESAME SEED SEPTEMBER 17TH , 2008

If we could explain in one word the current situation about Sesame Seed in India, the word would be " NERVOUS". Its been very strange last few months, a lot of people were bearish till two month ago , the same people turned bullish after the news of bad crop in U.P and M.P and the same people are bearish again as the news of a good crop in China started to spread around.

It seems like the very same reasons that took the markets to dizzy heights last year are holding it back this year around. If you refer to our market report of September 2007 ( Refer to http://sesameseedmarket.blogspot.com/ for old reports) you will notice that our main concern's then were the Shortfall in Chinese Crop and the falling USD against Indian currency which made the exports actually look more expensive than they actually were.

This year its again the same factors but totally reversed , China is said to have a better crop than last year which means that instead of "compulsive" buying which it had to do last time it can wait for the best opportunities and the cheapest destinations. The USD has appreciated by about 10% in the last 2 months and have made the prices look cheaper than they actually are in comparison to the local prices here in India which remain more or less constant with no major fall in the past 3-4 weeks. Of course we still expect that prices can go down further as and when the new crop arrivals start in full swing.

Its actually nice to see that the buyers have not panicky yet and have waited and covered only as per their requirements which has created stability in the market and a few traders and brokers have already started to get nervous and offering throw away price. However I think with all the bitter experiences of last year the buyers will be much better judges of character and service this year round.

After the high's of last year and the prices down by almost 50% compared to those high levels,
it is an open secret that current levels are very very attractive to the Importers despite the global slowdown in all Oil seeds but the fact remains is that just like the prices could not have kept going north it cannot just keep falling as well. I wish it was possible to judge the bottom but like last year we once again believe it is better to have the best lowest average price rather than knowing or missing
the lowest price.

The crop situation in India remains almost same as till 3-4 weeks ago, it has been raining heavily in Rajasthan and Gujrat in the past week and that is some concern again.Its not possible to judge the damage at such and early stage but we hope all keeps well. U.P and M.P are confirm to have not more than 50% of their total of last year and that should keep the stockists and speculators busy.Once again we think the up's and down's will be in quantum from now on as with the changing trends the degree of price variation is no more in small proportions but in 2-3 or more percentage points on daily/weekly basis.

The sowing in Africa is supposed to have started and we should get some news by next month about their sowing pattern's and estimates.The crop damage in Myanmar (Burma) is also confirmed and that should have some affect on china as a lot of that cargo goes to China through unofficial trade channels. The real impact of that will be known around End Oct/Early Nov when the real Chinese demand starts to build up in preparation for their New Year in January.

Our Initial Estimates for the India crop size is as follows

Origin Estimates Aug (Mts) Estimates in Sept (Mts)
U.P/MP 110,000 100,000
Rajasthan 110,000 100,000
Gujrat 70,000 70,000
Others 10,000 10,000
300,000 280,000


We also take the opportunity of inviting you to visit our Stall at SIAL , Paris from Oct -19th-23rd this year at the India Pavilion.It would be our pleasure and honor to meet you there.

MARKET REPORT SESAME SEED AUGUST 25TH , 2008

As we all have already experienced, it has been a crazy year for Sesame and probably for all

other commodities as well. The speculators loved every bit of it as they moved the markets up

to dizzy heights and then let it fall at will.

Sesame prices touched unthinkable highs of around $3500 PMT for Hulled and almost $3000 for Natural.When the prices were rising everyone thought they would continue to go up but demand slowed down and we saw a huge correction in the prices since.It was sad to notice big defaults from suppliers in the start of the season and then surprisingly when the prices fell it was the buyers who started defaulting and that created a further panic in the market and prices stagnated.

Another major factor which contributed to the price fall was the Rumor of ban on Oilseeds by the Indian Govt , they

infact did ban the Export of Edible oils but thankfully left the Oilseeds out of the ban preview. With a lot of commodities already banned now it is unlikely that they will ban the Oilseeds in the coming months as Oct-Dec is harvest time formost of India's Oilseed products.

The USD is still playing hide and seek and after falling by as much 13-14% in the Oct 2007- March 2008 period it has

once again risen by about 8-9% in the last few months and we hope it will continue to trade in this region making the

export competitive , but then again it is impossible to judge its movement.

We saw a very very quite buying period in the last few months as a lot of buyer were sadly stuck with high priced cargo and with low demand at high levels the sales obviously went down .Sesame as we all know is not a necessary

ingredient for most and with high prices of each and every commodity worldwide there was bound to be some slack in

demand. However what I noticed in my 3 week trip to Europe and US talking to clients and end users that atleast for the bakery industry the fancy toppings are becoming a must for survival as the consumers are demanding something "extra" for the high prices.However Big consumers such as McDonald's have been rumored to have approved lesser seeds on their buns.Another big market has emerged meanwhile in terms on Tahini for direct consumption and as an important ingredient in Hummus which is growing rather rapidly globally. The Sesame oil consumption continues to grow despite high prices in places like China and other South East Asian countries.

The big question in everyone's mind at the moment is the new crop in India and China. The Chinese crop as always remains a big mystery for everyone , however the initial report from various sources point at a satisfactory crop this year with no major crop damages.However certain people also did mention that a lot of sesame area was converted into Soya on Govt instructions as they aim to be self reliant on Soya which is their basic food ingredient by 2015. Overall the estimate is that China will have a satisfactory but surely not enough to fulfill their entire demand and they may end up importing their shortfall and may not buy as aggressively from India due to the 10% duty wavier that they get when importing from African nations.

The data that we have at the moment shows that India exported about 270,000 Mt from 1st April 2007-1st Aug 2008 which is up about 80,000 from previous years and almost corresponds to the crop estimate that gave in Dec 2008.The growth was mainly due the excess import of about 40,000 Mt than usual from China , about 10,000 Mt by Korea and about 10,000 by Turkey and ofcourse other nations imported a bit extra as well like the USA , Syria , Malaysia , Taiwan etc.

Origin	Initial estimates 2007 Crop in Sept	First revision in Nov 2007 (Mt)	Second revision in Dec 2007 (Mt)	Initial estimates 2008 Crop in Aug (Mt)
MP/UP	250,000	180,000	150,000	110,000
Rajasthan	100,000	90,000	75,000	110,000
Gujarat	50,000	40,000	35,000	70,000
Others	20,000	15,000	10,000	10,000
Total	420,000	325,000	270,000	300,000

Initial estimates 2008 Crop in Aug (Mt)

110,000

110,000

70,000

10,000

300,000

The above is just our initial estimates and these can ofcourse change depending on the weather in the coming months till actual harvesting is done. The carry over stocks in India are almost negligible at the moment and as not much buying was done from overseas we believe that the stocks in various destinations are also not big as probably everyone at this moment wants to get rid of their stocks before the new crop cargo starts arriving at the destinations.

We believe that the new crop should be ready for shipments around End Sept/Early Oct but the crop will arrive

in full swing by Mid/End of October.

Now to the prices.In usual practice the new crop prices should be at a discount of about 15-20% from the closing

levels of Old crop in September , but the market dynamics have changed vastly over the past few years.All will

depend on how aggressive or watchful the buyers are at the start of the season.It will be hard to judge the bottom

this year as the stockiest and defaulters made big money this year and with little or no shipments in the July-September period most of their cash flow will be open.Liquidity play's a very important factor in India as their is virtually no credit at local buying level here and all business is on spot payment.

No news of any Korean tender for the moment but we believe there should be one next month and then again in October.

A lot of buyers and suppliers have had bitter experience this year and we hope that the Buyer's will finally recognize

the integrity and good work done by some of the reputed exporters and will support them in order to clean up the

trade and make life easier for all of us.

We have the rainfall data and monsoon maps and data with us and if you wish to see please feel free to ask us

for the same.If you need any other information , please feel free to contact us.

We also take the opportunity of inviting you to visit our Stall at SIAL , Paris from Oct -19th-23rd this year at the

India Pavilion.It would be our pleasure and honor to meet you there.