Wednesday, September 9, 2009
MARKET REPORT SESAME SEED SEPT 9TH , 2009
However this year we think the whole crop is delayed by about 2 weeks so we don't see the arrival pressure's building before Mid of October or also possibly by 2nd half October as the Diwali festival in India is on the 17th Oct and farmers and traders are usually on a week's break during this festive period.
The crop situation has thankfully improved a lot over the past 2 weeks as compared to what it was perceived in early August with a very bad monsoon situation.In certain areas the drought is still very severe and we expect crop failure's in those areas, these area mainly fall in the Rajasthan/U.P/M.P border region.
The sowing this year started a little late and then we saw a big gap between the rains, some areas were able to sustain this period and with the rains back now we hope all will be alright.The only doubt that remains is a situation like last year where late rains resulted
in a huge crop damage at the time of harvest.
in a huge crop damage at the time of harvest.
As of now from what we have heard and seen , India's crop distribution should be as follows
--------------------------------------------------------------------------------
--------------------------------2008 Crop----------2009 Crop Estimates (Mts)
--------------------------------------------------------------------------------
U.P/MP-------------------- 85,000 MT ---------- 130,000 MT
--------------------------------------------------------------------------------
Rajasthan----------------- 90,000 MT---------- 80,000 MT
Rajasthan----------------- 90,000 MT---------- 80,000 MT
--------------------------------------------------------------------------------
Gujrat ---------------------- 60,000 MT---------- 60,000 MT
Gujrat ---------------------- 60,000 MT---------- 60,000 MT
--------------------------------------------------------------------------------
Others--------------------- 10,000 MT---------- 10,000 MT
Others--------------------- 10,000 MT---------- 10,000 MT
--------------------------------------------------------------------------------
Total -----------------------245,000 MT---------- 280,00 MT
Last year old crop is almost zero with only limited stocks available due to the bumper Summer crop we had in Gujarat earlier this year. Taking this into account we assume that market should remain stable this year at some lower levels , but this will again all depend on the Chinese demand and African crop which come out in Nov end/Dec this year.
Chinese are said to be having a good crop this year but as a fact we all know they will still need more than they can produce and will certainly buy from cheaper origins whenever possible.
Once again as you know in India things are a little different and we tend to overreact most of the time , ignoring smaller details and reacting in haste. We have already seen some low prices offers going out of India in the last 2 weeks after news of a good crop started to spread around but we still advice the buyers to be patient and not promote speculations as these speculators will then jump to buy in at the very arrival of new crop and give support to prices as they did last year.Which would eventually mean that prices may not actually fall as much as they should in the start of the season and will fall after these buyers cover themselves putting everyone in a bad position.
I'll keep this report short this time and hope to give in more details and numbers by the month end .
Please feel free to ask anymore questions that you may have.We also look forward to seeing you at our booth in Anuga next month.
WE CORDIALLY INVITE YOU TO VISIT US AT ANUGA,COLOGNE. OCT 10th-14th , HALL 1.1 BOOTH F 039a. INDIA PAVILION.
Kind Regards,
Mukul Gupta
C.E.O/Director
Shakumbhri Expo Impo Ltd,
4.5 Km Bhopa Road ,Muzaffarnagar , Uttar Pradesh , India , Pin - 251001.
Ph :- 91 131 2990062,2615164 , Fax:- 91 131 2615165 , Mob:- 91 9837084355
Website :- www.shakumbhri.org
Email :- mukul@shakumbhri.org
Email :- mugupta@hotmail.com
Skype :- mukulgupta78
C.E.O/Director
Shakumbhri Expo Impo Ltd,
4.5 Km Bhopa Road ,Muzaffarnagar , Uttar Pradesh , India , Pin - 251001.
Ph :- 91 131 2990062,2615164 , Fax:- 91 131 2615165 , Mob:- 91 9837084355
Website :- www.shakumbhri.org
Email :- mukul@shakumbhri.org
Email :- mugupta@hotmail.com
Skype :- mukulgupta78
Friday, August 7, 2009
Latest rainfall map for India, as you can see there is a very uneven rain distribution all over the country and while some would argue that less rains are good for sesame it seems like not just sesame but all other crops will be affected with this unusual rainfall and if less rain are considered as the barometer for a good crop we can safely say goodbye to the Gujrat crop where rainfall is much more than average.
Tuesday, July 7, 2009
MARKET REPORT SESAME SEED JULY 7TH , 2009
2008 was a rotten year for food prices. Prices climbed so high that very few could eat as well as they might have. 2009 in reverse has been a year of slow but steady consolidation. Prices have dropped but not crashed, food is cheaper again but still not back to the lows seen 2 years ago.
After a very boring season we are finally entering into the exciting time of the year. This is the time when people start throwing in their opinions , numbers for new crop quantity and some even speculative prices for the new season.
Just as we mentioned in our last report the price remains range bound in India with almost a very clear resistance level both on the upside and at the bottom. The volumes have dropped drastically, China and Turkey dont seem to be very active buying but still prices manage to hold firm. The Gujarat Summer crop was said to be 80,000 Mt and considering the daily arrival figures of the past 2 months and current arrival figures it might reach round 65,000-70,000 Mt if not 80,000 Mt. Which is still a very huge quantity for summer crop, but even that did not bring the market down crashing as everyone thought it would.
1:- The Summer crop arrival figures reflect that almost 45-50,000 Mt crop is already out in the market till date.
2:- Out of which we believe about 15,000 was used for the Korean Tender , another 15-20,000 Mt probably for Exports both Natural and Hulled combined.
3:- About 5,000 was consumed domestically.
4:- That means the stocks in our opinion should not be more than 10,000 Mt at most with stockists and Exporters.The Stocks would probably be used up if and when the next Korean Tender is announced or exported elsewhere.U.P/M.P stocks are almost negligible at the moment , I personally would'nt put them more than 1000-2000 Mt and for Rajasthan about 3000-4000 Mt at max.These stocks are spread over so many stockist that they would hardly create a ripple effect in the market even if we start to see some price decline in the coming months.
The current arrivals in Gujarat are down to 100-150 Mt per day and that should continue to serve the day to day requirement of the Hulling factories,domestic consumptions and spot demand for the next 1-2 months.
Now to the interesting part. It finally rained in Delhi/Mumbai this week.
"Delayed monsoons was the big media story only until it didn't rain in Mumbai. Now that it has started raining there, the monsoon story is suddenly over ..... or is it ? We don't grown sesame in Delhi and Mumbai and the news doesn't cover the villages that frantically."Touche :)
Monsoon is late and slow this year and thats a fact.Sesame as we know is a 90 days crop .Traditionally the Gujarat/Maharastra new crop comes out by end of September and other regions i.e U.P/M.P and Rajasthan 2 weeks later i.e by Early October. However this season due the delayed monsoon , Gujarat/Maharastra got their first rains in the last week of june and the sowing started in first week of July and is unlikely to finish before the 3rd week of July and in other regions it has not even commenced fully as yet, at best about 20-23% sowing estimated in some irrigated areas.
This means that the Gujarat new crop is unlikely to come out before first week on October and since Diwali is on 17th Oct this year the farmers traditonally do not get the crop into their market in a frenzy during that week so the arrivals will pick up only around End October. The new crop is unlikely to reach respective destinations before Early November/Mid November and the big question is that do the buyer's have enough stocks to sustain till that long?
All said , we are not very concerned about the 2 weeks delay , that is manageable. The concern is that the rains are still not favorable in most regions. It rained for a few days and the rains are gone again which is definitely not enough for any crop including sesame and the worst is that the Indian Meteorological Department still says that we will have a good monsoon which means that the spread of rains is now concentrated over the next 2 months which is not good news specially for a crop like sesame.
The seeds can do with little rains but if we have a situation like last year when it rained too much at the wrong time we might have a big problem on our hands.The acerage of sesame is bound to go up even this year as the farmers have been getting very good price for their products over the past 3 years and that should be an encouraging fact for them.However last years disaster has prompted a lot of farmers to go in for dual crop , one which requires more water and the other drought resistance to safeguard their interest.
African stocks are heard to be limited as well and should be enough to sustain the Ramadan demand. A few African countries Tanzania, Mozambique will now have new harvest season.China we believe despite their big crop will continue to remain a net importer and Japanese demand which was slow this year due to the very large quantity and long term contracts they entered into last season will expire and they are heard to be running on low inventories as well.
In Ethiopia most inventory is in traders' hand, farmers have a small number of goods. The majority of local traders believe that the total inventory is in 25,000 tons level and some local traders think that the total inventory is 40,000 tons to 45,000 tons. Stocks in Sudan are also not estimated to be very large and with their new crop still 5 months away i.e End Nov/Dec the chances of prices falling there are slim too.
This year high prices in India diverted a lot of quantities and buyers to Africa.Even India is supposed to have imported more than 5000 Mt of African Sesame at lower levels, is this the sigh of things to come. Is India going the china way? We know for a fact now that at high levels demand will suffer from India.
Taking away the demand at higher levels which was evident this season, in the long run will only help sesame because the market will adjust and naturally correct itself. Sesame is a large cash crop in India, we produce about 700,000 Mt annually and export about 30% out of it obviously consuming the rest.Like China the domestic demand is getting bigger and bigger each year along with the exports. And for sesame India is the world’s biggest exporter ,2nd largest producer, 4th largest consumer . Surely, it should learn to stand on its own feet. We have had a large exportable surplus for the last two years because sesame seed production has outpaced our capacity to hull or export.
What will happen if there are less exports? There is every chance local prices will crash due to oversupply, creating misery for farmers. Second, since domestic prices will crash, local crushing mills will have a bonanza. Their raw material would become substantially cheaper with no rival bids from exporters.The cheaper oil then finds its way into the already established edible oil sector for direct or blending purpose. This oversupply problem would, however, only happen for one season. In the next season, farmers will stay away from sesame, they won’t touch a crop for which there are no takers. The oversupply situation would correct itself and once again there would be a balance between demand and supply. The sesame industry will discover it was a phyrric victory.
More broadly, a reduction in India’s crop would reduce the global availability of sesame drastically. Demand for sesame seed internationally would also recover as the world economy gets back on its feet. That would push up world prices, creating an opportunity for Indian exporters once again. In other words, if there is no artificial prop for exports, by 2010 India’s sesame prices would correct itself with new price equilibrium.
The bad news is that 2009 will be tough. There would be plenty of tears, recriminations and guilt. Farmers are planting the 2009 crop on the basis of the fantastic price they got in 2008 from exporters and stockist.They made good sales in the past 2 yrs and are now financially in a better position to bargain a little, they showed that all this season by holding back whenever they thought prices were following.Can they do it again this season?
Its still too early to comment or predict where the prices will be 2-3 months from now.We still hope that India has a good crop, prices reach a balance which is good both
for the consumers and the farmers and we see renewed demand once again.Larger crops mean greater liquidity and depth in the physical as well futures markets, bigger corporate players and more investment in forward and backward linkages. All this to me appears like a definite thumbs up for the commodity markets in India.
Let's say cheers to that and hope that banks actually have the money to lend.
After a very boring season we are finally entering into the exciting time of the year. This is the time when people start throwing in their opinions , numbers for new crop quantity and some even speculative prices for the new season.
Just as we mentioned in our last report the price remains range bound in India with almost a very clear resistance level both on the upside and at the bottom. The volumes have dropped drastically, China and Turkey dont seem to be very active buying but still prices manage to hold firm. The Gujarat Summer crop was said to be 80,000 Mt and considering the daily arrival figures of the past 2 months and current arrival figures it might reach round 65,000-70,000 Mt if not 80,000 Mt. Which is still a very huge quantity for summer crop, but even that did not bring the market down crashing as everyone thought it would.
1:- The Summer crop arrival figures reflect that almost 45-50,000 Mt crop is already out in the market till date.
2:- Out of which we believe about 15,000 was used for the Korean Tender , another 15-20,000 Mt probably for Exports both Natural and Hulled combined.
3:- About 5,000 was consumed domestically.
4:- That means the stocks in our opinion should not be more than 10,000 Mt at most with stockists and Exporters.The Stocks would probably be used up if and when the next Korean Tender is announced or exported elsewhere.U.P/M.P stocks are almost negligible at the moment , I personally would'nt put them more than 1000-2000 Mt and for Rajasthan about 3000-4000 Mt at max.These stocks are spread over so many stockist that they would hardly create a ripple effect in the market even if we start to see some price decline in the coming months.
The current arrivals in Gujarat are down to 100-150 Mt per day and that should continue to serve the day to day requirement of the Hulling factories,domestic consumptions and spot demand for the next 1-2 months.
Now to the interesting part. It finally rained in Delhi/Mumbai this week.
"Delayed monsoons was the big media story only until it didn't rain in Mumbai. Now that it has started raining there, the monsoon story is suddenly over ..... or is it ? We don't grown sesame in Delhi and Mumbai and the news doesn't cover the villages that frantically."Touche :)
Monsoon is late and slow this year and thats a fact.Sesame as we know is a 90 days crop .Traditionally the Gujarat/Maharastra new crop comes out by end of September and other regions i.e U.P/M.P and Rajasthan 2 weeks later i.e by Early October. However this season due the delayed monsoon , Gujarat/Maharastra got their first rains in the last week of june and the sowing started in first week of July and is unlikely to finish before the 3rd week of July and in other regions it has not even commenced fully as yet, at best about 20-23% sowing estimated in some irrigated areas.
This means that the Gujarat new crop is unlikely to come out before first week on October and since Diwali is on 17th Oct this year the farmers traditonally do not get the crop into their market in a frenzy during that week so the arrivals will pick up only around End October. The new crop is unlikely to reach respective destinations before Early November/Mid November and the big question is that do the buyer's have enough stocks to sustain till that long?
All said , we are not very concerned about the 2 weeks delay , that is manageable. The concern is that the rains are still not favorable in most regions. It rained for a few days and the rains are gone again which is definitely not enough for any crop including sesame and the worst is that the Indian Meteorological Department still says that we will have a good monsoon which means that the spread of rains is now concentrated over the next 2 months which is not good news specially for a crop like sesame.
The seeds can do with little rains but if we have a situation like last year when it rained too much at the wrong time we might have a big problem on our hands.The acerage of sesame is bound to go up even this year as the farmers have been getting very good price for their products over the past 3 years and that should be an encouraging fact for them.However last years disaster has prompted a lot of farmers to go in for dual crop , one which requires more water and the other drought resistance to safeguard their interest.
African stocks are heard to be limited as well and should be enough to sustain the Ramadan demand. A few African countries Tanzania, Mozambique will now have new harvest season.China we believe despite their big crop will continue to remain a net importer and Japanese demand which was slow this year due to the very large quantity and long term contracts they entered into last season will expire and they are heard to be running on low inventories as well.
In Ethiopia most inventory is in traders' hand, farmers have a small number of goods. The majority of local traders believe that the total inventory is in 25,000 tons level and some local traders think that the total inventory is 40,000 tons to 45,000 tons. Stocks in Sudan are also not estimated to be very large and with their new crop still 5 months away i.e End Nov/Dec the chances of prices falling there are slim too.
This year high prices in India diverted a lot of quantities and buyers to Africa.Even India is supposed to have imported more than 5000 Mt of African Sesame at lower levels, is this the sigh of things to come. Is India going the china way? We know for a fact now that at high levels demand will suffer from India.
Taking away the demand at higher levels which was evident this season, in the long run will only help sesame because the market will adjust and naturally correct itself. Sesame is a large cash crop in India, we produce about 700,000 Mt annually and export about 30% out of it obviously consuming the rest.Like China the domestic demand is getting bigger and bigger each year along with the exports. And for sesame India is the world’s biggest exporter ,2nd largest producer, 4th largest consumer . Surely, it should learn to stand on its own feet. We have had a large exportable surplus for the last two years because sesame seed production has outpaced our capacity to hull or export.
What will happen if there are less exports? There is every chance local prices will crash due to oversupply, creating misery for farmers. Second, since domestic prices will crash, local crushing mills will have a bonanza. Their raw material would become substantially cheaper with no rival bids from exporters.The cheaper oil then finds its way into the already established edible oil sector for direct or blending purpose. This oversupply problem would, however, only happen for one season. In the next season, farmers will stay away from sesame, they won’t touch a crop for which there are no takers. The oversupply situation would correct itself and once again there would be a balance between demand and supply. The sesame industry will discover it was a phyrric victory.
More broadly, a reduction in India’s crop would reduce the global availability of sesame drastically. Demand for sesame seed internationally would also recover as the world economy gets back on its feet. That would push up world prices, creating an opportunity for Indian exporters once again. In other words, if there is no artificial prop for exports, by 2010 India’s sesame prices would correct itself with new price equilibrium.
The bad news is that 2009 will be tough. There would be plenty of tears, recriminations and guilt. Farmers are planting the 2009 crop on the basis of the fantastic price they got in 2008 from exporters and stockist.They made good sales in the past 2 yrs and are now financially in a better position to bargain a little, they showed that all this season by holding back whenever they thought prices were following.Can they do it again this season?
Its still too early to comment or predict where the prices will be 2-3 months from now.We still hope that India has a good crop, prices reach a balance which is good both
for the consumers and the farmers and we see renewed demand once again.Larger crops mean greater liquidity and depth in the physical as well futures markets, bigger corporate players and more investment in forward and backward linkages. All this to me appears like a definite thumbs up for the commodity markets in India.
Let's say cheers to that and hope that banks actually have the money to lend.
Monday, April 27, 2009
Korean Tender- April 27th , 2009
As most of you would already be aware by now that a Korean Tender for Natural Sesame Seed was announced last week on the 24th.
India got 4800 MT in the range $1343 PMT - $1363 PMT. The balance 1200 Mt was awarded to Pakistan.Once again notable absence of African participation. The prices in Africa as still on the higher levels and with limited stocks there are well they do not seem to be in a hurry to sell cheap, specially when they know the fact that any revival of demand from China or the Ramadan demand has to be catered by them as no other origin is in a position to offer huge quantities.
The tender price is very smartly based on the anticipation of a good summer crop in India , as these levels do not match the current prices in the market we doubt that it was a discounted sale of stocks. The new summer crop arrivals should start to trickle in the first week of May and as the arrival pressure pick up we should see some price corrections. However we don't expect a free fall in prices in May as the initial arrival pressure will be eased with the buying for the Korean Tender which needs to sail out by next month end.
Everyone is now talking about a big summer crop , but as we mentioned in our previous reports the stock situation other than the Summer crop is very small. Everyone is waiting and counting on the summer crop and that optimism should act as a potential barrier in free fall of prices.
Moreover African exporters seem to be in no mood of offering a huge discount anytime soon and that could help keep international price level at sustainable levels.
A few more Korean tender will surely be announced before the Indian new crop in September and that means at
conservative levels about 15,000 Mt ( Including the current tender )from the summer crop will be dedicated to the
Korean tender alone.Which leaves us with about 25-30,000 Mt at max for rest of the worlds supply.However with
current demand at historical lows we still do not see any huge buying rush specially in the summer months.
Its been a boring year , just as we anticipated in our report at the start of season in November.There seems no reason that the next 4-5 months will be any different.However the buyers should be careful as ultimately the end users are consuming , if they are not supplying then probably their competition is.
If price is a deterrent in the sesame consumption , then I am hopeful that people will either learn to live with the high levels or the prices will fall in the coming new season in October. If other substitutes have replaced the use of sesame due to low prices will have lower cushion for a fall compared to sesame and that means at lower levels sesame will not just regain it demand but should also take market share of other substitutes just as they have taken its.
Prices of most food commodities, already up by a fifth in past over a month, are bound to climb as the global economy heads for a recovery. Though the prices of most industrial commodities have fallen on year, prices of food commodities like sugar, edible oil,pulses, fruits prices saw a sharper rise, pinching consumers.
What has been interesting this year is that the market has been very range bound , moving 3 steps forward and
then 2 steps back , the same story should continue in the coming months as well. This should bring stability to the prices and with a narrow band to move in the client confidence should resume and we hope to see some cheer back in the market.
Will be very interesting to see the actual size and impact of the summer crop in the coming few weeks.
USD still remains a major price determining factor as we have noticed in the recent past..
Thursday, April 2, 2009
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.
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