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High prices at home force India to import raw sesame

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India, a net exporter of sesame seed, imported the plant seed from Ethiopia between November last year and January to take the benefit of prevailing low prices in the African country, leading traders said.

The high prices in the domestic market had forced some of them to import the raw seeds during the three-month period. During this period, they exported the plant seed after processing the low-cost imported seeds.

According to trade estimates, between November and January, about 4,000 tonnes of sesame seeds were imported by traders based in Mumbai, New Delhi and Gujarat.

“Some of the Indian traders imported sesame this year to take advantage of lower prices prevailing in the international market,” said of Sonpal Agri Exports, which is based in Gujarat's Amreli.

He, however, said the trend may not continue for long as Indian sesame prices were coming down. Moreover, local consumption of sesame was also limited. India consumes only about 20 per cent crop of its total production.

Because of the rise in prices of the seed, India was also losing some of the export markets to some of the African countries. India has been a significant player in the export market for but in the current financial year, exports are estimated to be only 160,000-175,000 tonnes against exports of about 225,000 tonnes in 2007-08.

In the quarter ended December, sesame seed price reached Rs 1,450-1,500 per 20 kg. However, this month, sesame price has come down by Rs 60-80 per 20 kg and was now quoted at Rs 1,300-1,310 for 99/1 quality and Rs 1,260-1,280 for 98/2 quality in Gujarat.

Globally, Indian natural sesame seed fetches $1,380-1,400 per tonne and Ethiopian sesame gets $1,400-1,420 per tonne. In January, Indian sesame price was about $1,500, while Ethiopian sesame sold at $1,275-1,280 per tonne.

China, the European Union (EU) and the US who buys sesame from India have already moved to Ethiopia as the quality of seeds available there is of natural quality. The natural sesame seed is gently toasted to create a unique strong nutty flavour. During toasting of the seeds, the moisture is removed, which preserves the sesame seeds for longer period of time.

Sonpal said, “Last year, China was the biggest buyer of Indian sesame seed after Korea. Turkey and European countries also came to India for sesame. However, Korea is the only leading buyer this year. Europe buys hulled sesame in a less quantity. China has turned to Ethiopia and Sudan as their prices are lower than India. But now China may come back to India as domestic price has started falling since last few weeks.”

India bagged 4,200 tonnes of export order from the tender floated by Korea out of 6,000 tonnes in the first week of this month. The export order initially resulted in a rise in the prices in the local market but eventually the rates started falling.

Trade estimates for sesame seed output in India this season (October 2008 to September 2009) is that it will be in the range of 250,000 tonnes to 275,000 tonnes.

It was 350,000 tonnes last year.

Production in Ethiopia is estimated to be around 112,000-130,000 tonnes this year. Production of summer crop, however, is predicted about 50,000-60,000 tonnes in Gujarat, much higher than last year's 35,000 tonnes.

Sonpal Agri Export had bagged a 1,800-tonne export order from Korea. “The price will come down as there is no demand from abroad as well as domestic market. Everybody is waiting for the summer crop, which will come after mid-April. At present, there are little chances of a price increase,” Sonpal added.

“Yes, it is a fact that Ethiopia has broken Indian dominance as of now but on the other hand, the world has no choice for hulled quality except from India,” said Suresh Chandarana of Rajkot-based Dhaval Agri Export, which also bagged a 1,800-tonne export order from Korea.

Sources in Kotak Agri International, which deal in agri commodities, said, “Prices are not likely to increase as there is no such demand for exports and the domestic market is witnessing buyers only from South India."

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