The price of sesame dropped to USD 500 from 1,200 per ton in one month. Following the turn of events, exporters have been hesitant to supply, preferring to wait for the price to improve.
However, for industry players like Philippos Philippas, president of the UK-based Huyton Inc. Group, exporters are trending unhealthy. If they persist to do so, he told The Reporter that they will face loss in waiting and speculating for the price to rise up.
Philippas, who attended the 4th international conference organized by the Ethiopian Pulses, Oilseeds and Spices Producers and Exporters Association (EPOSPEA), said that Ethiopian exporters should be cautious not to replicate the same mistakes of the Sudanese – the third largest producers in the world. It is to be recalled that last year the Sudanese ended up exporting about 285,000 tons of sesame, which was way lower than what they originally planned.
“The global consumption is about 1.4 million metric tons and the availability is going to be about 1.7 million tons. Hence, there will be a surplus and that surplus will pressure the prices. The point I want to emphasize is that last year the sellers pushed the prices up. As a result, consumption was reduced worldwide. I don’t want the buyers to do the same now”, Philippas warned.
Following the delayed rain and drought in China, which stands the 40 percent buying nation of Ethiopia’s sesame, some exporters are not worried by the current low market price. In September, sesame was sold at USD 2,200 per ton. However, in October the price went down to USD 1,700. Philippas estimated that the latter price will remain to be the market price of Ethiopia for the year. However, Haile Berhe, president of EPOSPEA, differs in opinion. The prices are known to be fluctuating for years and exporters will behave accordingly, he argues.
The orchestra of the sesame market seems to get louder when China said that it will ship close to 850,000 tons for the year. That again annoys Philippas who strongly criticized the Chinese side for not providing the realistic volumes they will buy. For Philippas, the best China will buy is set at a maximum of 650,000 tons. The Sudanese production for this year also was questioned.
It intends to bring some 600,000 tons of sesame this year. Yet, half of the total produce is destined for local consumption in Sudan.
Ethiopia this year expects to harvest 350,000 tons of sesame. Previously, the government was bullish to produce and export 500,000 tons. Realizing the unrealistic plan, the target was reset to 350,000 or less. The concluded budget year production stood at 270,000 tons. According to Assefa Mulugeta, director general of the export promotion directorate general, this year harvest will be challenged due to the heavy rainfall and windy weather condition witnessed affecting the major producing regions in northern Ethiopia.
Huyton Inc. Group was associated in supplying coal to the Ethiopian Petroleum Enterprise (EPE) since 2011. The contract was terminated after the government had bought 800,000 tons of coal form Huyton in three years. However, the group sticks on supplying in wheat and barley for the beer industry. Huyton mostly is known for being one of the major buyers of sesame, shipping out some 40,000 tons a year.
[WaltaInformationCenter]