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India is skidding into the sesame seed disaster

October 18, 2016 at 8:41 AM , Der AUDITOR
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DALIAN. News from China could not possibly be worse. At least for the Indian exporters. Is there an impending collapse?

Exporters are fearing for the worst
Off the record, several Indian exporters are saying that the sesame seed prices will collapse soon. The problem: China, the foremost consumer of sesame, built up huge stocks of sesame and now cannot manage to reduce them, despite a weak crop in China itself. Thus, traders could sell only 20,000 mt of the official supply stored in Chinese ports within the last three months. However, there are still 185,000 mt of sesame seeds stored in Chinese warehouses. The problem is the domestic demand, which is simply too weak. The fact, that the Chinese economy has greater problems than they want to admit to officially has become common knowledge of late. In light of the recently published figures from China, a short-term improvement is not to be expected.
The impact on India will be tremendous, since India was relying on a strong demand from China after reports spoke of major problems with the Chinese harvest. Since the African crops will be ready soon, also, it is hardly likely that China will be purchasing any Indian sesame seed. After all, Chinese importers have to pay a 10% import tax on Indian sesame while there is no import tax on African sesame at all. That is a major advantage for the African exporters.  

 

All hopes rest on the SIAL
This is a tough blow for the Indian sesame seed market, since business with the USA, as well as Europe, is coming along only very slowly. Of late, it was possible to make good deals only with buyers from Asia. Now hopes rest entirely on the SIAL, and that it will be possible to enter into larger contracts there with European buyers. Should these hopes be shattered, the Indian exporters’ fears could come true, and the market would collapse totally.

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