Sesame may fall on slow demand

Written by Dhimant Bhatt | Mumbai, Aug 29 | Updated: Aug 30 2008, 08:17am hrs
Sesame seed spot prices may come down from the current peaks over the next few days, on slow demand supported by some offerings by stockists and farmers ahead of new crop arrivals. Spot prices of natural white (98 grade) in Rajkot have increased by 12% to trade at Rs 7,050 per quintal on Friday over the past two weeks on reports of low area covered under sesame in major producing states.

Prices in the international market have reached to recent highs of around $3,500 a tonne for hulled and nearly $3000 for natural grade. Spot prices have increased because the area under sesame seed has been estimated to be lower than that of last year due to unfavorable weather conditions in major producing states. As a result, the total estimated crop is lower than that of last year, Sanjay Shah, a leading trader, said.

Market reports stated that South Korea has floated a tender of 6,000 tonne of sesame seed (natural white) for shipments in October and the bids would be thrown open on September 5. Traders from China, Pakistan and Indian may participate in the tender.

Exporters from India may not get much preference over our traditional rivals. Indian traders may face stiff competition from their Chinese counterparts, as they offer better quality sesame seed. Apart from this tender, the overall export demand has been slow, a local exporter said. The new crop should be ready for the market around end-September or early October, but crop arrival will be in full swing by end of October, whereas fresh arrivals in China will start by September. Exporters in Africa also have sufficient stocks-on-hand, market sources said.

It is difficult for exporters to corner sufficient quantity for the South Korean tender. The overall stock in Gujarat is believed to be lower than expectated, the exporter said.