Sesame seed prices surge on expectation of lower output

Shefexil estimates production at 2,53,000 tonnes due to rains and lower acreage

An adverse climate, including an extended monsoon in growing regions, will dent sesame seed production in 2013-14. The latest crop survey by the Shellac & Forest Products Export Promotion Council (Shefexil, a trade body sponsored by the ministry of commerce) says production might fall by 11.7 per cent in 2013-13 to 253,000 tonnes, due to lower sowing area (down 5.8 per cent) and yield (down 6.2 per cent). However, trade sources expect demand from abroad to remain strong, pushing prices upward.

Shefexil had estimated Gujarat’s production at 119,000 tonnes but recent rains in the region are feared to have caused crop failure to the tune of 20 per cent. Traders believe Gujarat’s seed production will not exceed 75,000 tonnes. The report estimates Rajasthan will produce 57,000 tonnes, Madhya Pradesh 33,000 tonnes, Uttar Pradesh 37,000 tonnes and Maharashtra about 8,000 tonnes.

The fear of crop loss in Gujarat has led to heavy buying from traders., “Traders taking forward positions for November and December contracts have been buying in big quantities since the beginning of this month. Good quality arrival has been merely 10 per cent in the overall arrival in Gujarat and in other parts,” said Manoj Sonpal of Sonpal Agri Export, a leading exporter and trader of sesame seed from Amreli. As a result, seed prices have jumped this month till date by about Rs 600 per 20 kg for the best quality product, to reach Rs 3,000 per 20 kg. The medium and lower grades are trading at Rs 2,800 per 20 kg and Rs 2,400-2,500 per 20 kg.

In the international market, India’s sesame seed is being quoted at $2,700-2,800 a tonne.

Sureshbhai Chandarana of Dhaval Agri Export from Rajkot said, “With forward traders buying, export demand from Europe and China is also there. The heavy rainfall in Gujarat has changed the production scenario and traders have started covering their positions. At this price level, demand might slow down a bit.”

He felt prices would not come come down by much for a few months, as export demand was likely to be strong. Additionally, exporters are also awaiting South Korea’s tender for 7,000 tonnes, likely to come by the end of this month.

Trader say about 20,000 tonnes of forward contracts has already been traded for November and December deliveries.

Sesame Crop Estimate
State	Area ('000 Ha)	Production ('000 tonnes)	Yield (Kg/ha)
Gujarat	150	119	789
Rajasthan	521	57	109
UP	338	37	108
MP	281	33	118
Maharashtra	48	8	169
Total India	133.8	253	189

Source: Shefexill Sesame Crop Survey