Sesame Seeds - Market Overview & Future Trends 2018-2020

Sesame seeds production has been increasing over the years along with its demand.  The edible oilseeds coming in the assorted range of white, black & brown are one of the most favored crops to farmers for its resistance to withstand unfavorable weather conditions & grow with minimum attention. Growing popularity of sesame seeds as a functional ingredient in several foods on account of its ability to facilitate digestion and reduce hypertension is a key driving factor in the market. Furthermore, the rising application of the product as an anti-oxidant in various pharmaceutical formulations is expected to drive growth to the Indian sesame seeds market in the years to come.

Indian Sesame Seeds Market Dynamics: Drivers & Restraints

Market Drivers:

• Call for Natural & Clean-Label Ingredients: Changing consumer consumption patterns & increasing health awareness are driving growth & innovation to the varieties of sesame seeds.
• Sesame Trend in CPG Categories: The burgeoning demand for the authentic Mediterranean and Arabic food items like Tahini, Hummus, increased consumer inclination toward seed-based spreads, and upgraded technology to produce innovative products to meet consumer demand, are another set of factors contributing to the demand for Indian sesame seeds worldwide.
• Soaring Demand for Organic Sesame: Expanding vegan population base & online grocery trends are laying forward a promising market for the organic sesame seeds of India.
• Advancements in Hybrid Varieties: Nine hybrid varieties of sesame seeds are currently produced in India. Advancements & innovations in terms of hybrid varieties are expected to further drive the demand & enhance the Indian sesame seeds market share in the future.
• Opportunities in Niche Segments: The mainstreaming of non-traditional foods seems to fuel the European demand for Indian sesame seeds.
• Weather-tolerant & Lower risk Crop: Sesame farming does not require advanced resources for cultivation, irrigation & fertilization. It is a versatile crop which is highly preferred for cultivation owing to its unique attributes of rapid phenological development and drought/ heat tolerance.

Market Restraints:

•  International Price Fluctuations: Price levels for sesame seeds from different origins show similar developments & indicate a price interdependency between the various global suppliers. Sesame has annual price volatility of around 25 to 30% and this is mainly due to the supply issues rather than the crop failures. Following the price interdependency, the global market is made to rest on the annual volumes produced in India and China.
• Strong International Competition: African sesame seeds with a notch under prices are seamlessly giving a stiff competition to the sesame seeds of Indian origin. With a poor harvest yield, the sesame crop failed to commensurate with the domestic & global demands last year. The deficient supply has apparently triggered the price rise & has chiefly attributed to the consumers shift towards the alternative markets in Africa.
• Salmonella risk in sesame seeds: Allergies associated with the commodity are also holding back the growth of Indian sesame varieties in international markets.

Indian Sesame Crop & Market Status 2018-2019:

India produces a wide range of sesame seed varieties and grades each peculiar to the region where they are grown. For years, India has been one of the forerunners in the global sesame market.

However, the production volume of India has been lagging since its major plunge in 2016. This is mainly due to the poor climatic conditions in production regions in India. The Eastern & Western regions, which are known for their production of sesame seeds, were severely hit by floods and monsoons. With the detrimental weather conditions, crop damage was inevitable, causing a bleak turnout to produce the crop.

The Indian crop of sesame seeds was short by 60% this year. As against 418000 MT last year, the harvest yield of sesame seeds was estimated at around 178000 MT during 2018.

Indian Sesame Export Volume & Revenue 2018:

Sesame seed exports during April-November 2018 increased marginally to 2,25,606 tons in comparison to 2,24,376 tons during the corresponding period the previous year. In value terms, Sesame seed exports increased to 2524.72 crores from 1852.57 crores during the FY 2017-2018.

India, however, imported a record high volume of 70000- 80000 MT of sesame seeds in the year 2018. The import from Sudan accounted for 40000 MT while the remaining lot was sourced from the regions of Nigeria & Ethiopia.

Indian Sesame Seeds Average Prices (USD/ MT)

At the onset of 2019, the prices of various oilseeds in India were hovering around the levels as follows:

Gleanings & Market Forecasts:

• An underneath crop of Indian sesame seeds culminated with a meager yield of 178000MT and carryover of around 15000 MT in the year 2018.
• The sharp increase in sesame seed prices owing to crop failure has put exporters in a tight spot. While most of them have made forward contracts at lower prices, they are now facing difficulty in meeting their export obligation as prices have almost doubled in the last year.
• The African imports have started to trickle in which will keep the global supply chain well lubricated for the months to come
• With recent occurrences of natural disasters damaging sesame seed farms in India, however, consumers are now turning toward alternative markets in Sudan, Ethiopia & Nigeria.
• India will have to import Sesame Seed from Africa in large quantities to keep its Hulling factories running.
• The African countries are expected to dominate the sesame seed market both in terms of production and export while the Asian imports are expected to increase in the coming years.
• Sudan was a major contributor to the global production of sesame seeds in the year 2018. The sesame yield of Sudan is projected to be highest around 700000 MT.
• The latest Korean tender reveals that the supply of Indian sesame seeds will be limited this year regardless of the higher prices.
• Increasing demand for sesame-based foods and rising health awareness on the same are forcing various sesame seed producing companies to introduce seeds with high yield and better weather tolerance.
• Cereal bars like Sesame Honey Energy Bars are high on demand in Europe. Innovations like ready-to-use (organic) tahini, snack options with black sesame and sesame milk also expected to boost the market for sesame seeds.
• Sesame seeds are trendy in new product launches across the CPG categories. The mainstreaming of non-traditional foods is gradually fuelling the European demand for sesame seeds & broadening the Indian sesame seeds market globally.
• Greece was the largest importer of sesame seeds in Europe followed by Germany, the Netherlands, and Poland during 2018.
• The growth of sesame seeds imports in Europe is noteworthy: the import rates are on a constant increase of 3% annual rise. Europe is emerging as another major market for Indian sesame seeds with increasing health awareness and change in diet pattern among the European consumers.
• With the outbreak of the 'trade war' between China and the U.S, the sesame seeds prices are becoming highly volatile.
• The Asia-pacific has been the leading importer of sesame seeds for years. This, however, may change in the future as Europe is stepping up their imports of sesame seeds with Greece as their forerunner.
• Although Ethiopia and Tanzania have been the most dominant suppliers of sesame seeds, the two countries are not in the process of harvesting for the rest of the year. --Egypt and Kyrgyzstan, on the other hand, will begin their harvest for the fourth quarter, making them a favorable alternative for sesame seed consumers for the rest of the year.
• The market for Indian sesame seeds is forecasted to surge during the coming years, with Europe growing as the newly rising market.
• Better mechanism to forecast the production of sesame seed accurately may significantly boost India’s exports apart from the measures to boost its yield.
• An upward trend is manifested for future productions, the global sesame market is expected to grow 9.5 million tonnes by 2025.
• The global sesame seeds market will be growing at 4.2% CAGR during 2019-2024 owing to the increasing demand from the food, medical and pharmaceutical and confectionary industries because of the cancer prevention, diabetes treatment, boost bone health, improve digestion and skin and hair care attributes.
• Indian sesame seed export during 2019 is likely to take a hit owing to a shortfall in Kharif season crop and on higher price as well as competition from African countries.
• Indian rupee is expected to appreciate in the short term, which is good news for importers as Indian sesame imports are likely to double when compared with last year.
• IOPEPC forecasts India’s sesame seed production for the current season 2018-2019 closer to 178,000 tons.