Introduction

Sesame seed has been enjoyed by humans since the dawn of civilization. However, the exact origin of sesame plant has been lost in history. Asia and Africa are believed to be the earliest homes of the plant. The Chinese used sesame seeds some 5,000 years ago for preparation of ink blocks. In ancient Egypt, the seeds were ground and used as grain flour. Evidence suggests that the plant had been in cultivation in areas now comprising Pakistan as early as 3,500 years B.C.

Varities

There are several varieties of sesame plant in the world. The plant grows from 2 to 9 feet in height, depending on variety. It bears capsules, which contain seeds. The colour of seeds varies from pure black to creamy white to pure white and red. The size of the seed, its hardness, taste, colour, oil content and power of resistance to pests depend on the variety.

Economic Importance

Sesame seed is rich in fat, protein, carbohydrates, fibre and some minerals. The aroma and taste of the seed are mild and delicious. It has a nut-like slightly sweet flavour. It is used mainly as a food ingredient in whole, broken, crushed, shelled, powdered and paste forms.

The whole seed is extensively used in the Middle Eastern and Asian cuisines. A typical halvah is made from crushed, roasted and sweetened seeds. Some people believe that due to considerable presence of niacins (8.9 mg per 100 grams), the seed assists against ageing of the human body.

In view of this, a liquid sesame product is prepared and drunk by both, men and women, in the Middle East for rejuvenation of mental and physical capacities. In the USA and Europe, the seeds are used to flavour and garnish various foods, particularly bread, cookies, snacks, biscuits, sweets and other delicacies.

A prized oil is extracted from sesame seeds. Normally, the oil constituent is from 40 to 60 percent. This king of oil seeds is renowned for its stability. It strongly resists oxidative rancidity even after long exposure to air. It is used in cooking and salad dressings. It is also used in the manufacture of soaps, pharmaceuticals and lubricants. It has some uses in cosmetics and skin care industries.

Global Scenario

Production

The global production of sesameseed has been improved at a slow pace compared to other oilseed crops in the last two decades. The world on an average produces close to 30 lakh tons of sesameseed every year. The corresponding graph depicts the trend in the global sesameseed production.

Around 60-65 countries of the world produce sesameseed. Asian and African countries are the major producers of this. The top five producers account for around 70% of the production. China, India, Sudan, Myanmar, Uganda, Nigeria, Bangladesh, Pakistan, Tanzania, Mexico, Thailand and Egypt, in that order of rank, are the top-twelve producers of this seed.

Exports and Imports

The global exports of sesameseed is estimated to be around 5 to 6 lakh tons. India, China, Mexico are the major exporters of this commodity, while Japan is the single largest buyer of sesame seeds in the world. The country imported 164 thousand tonnes of seeds in 2000. The second largest importer is Egypt. Her imports in 2000 totalled 85.9 thousand tons. South Korea and USA rank third and fourth respectively, with imports in 2000 equal to 70 thousand tons and over 49 thousand tons. Fifth in the world, the Netherlands is the largest buyer in Europe. It imported 32.33 thousand tons in 2000. Other major importers include China (39.5 thousand tons), Syria (29.9 thousand tons), Saudi Arabia (20 thousand tons), Greece (19.30 thousand tons), Israel (18.6 thousand tons), Mexico (17.5 thousand tons) and Germany (17.3 thousand tons).

Indian Scenario

Production

Sesameseed has been cultivated in India for centuries and it is a traditional source for edible oils for certain sections of the Indian community. Sesameseed is also used in India for direct consumption as an ingredient for several snacks. The health benefits of this wonder seed are also known to Indians since centuries and the oil and the seed directly are used in several ayurvedic medicines. The production of sesameseed in India highly fluctuates, following the vagaries of the monsoon as the crop is largely cultivated on rain-fed tracts. In addition, the area also fluctuates with the price competitiveness against other competitive crops like groundnut and castor.

The per hectare yield of the crop has been observed to be improving in the recent decades as a result of better crop management practices. The yield is around 500 kg a hectare at present.

India's Sesameseed Production

India produces a wide variety of sesameseeds varying in colour from whit to red to black, with oil content varying from 40 to 50 %. The white and black seeds are mainly used for direct consumption by its addition in several foods and for exports. The brown seeds are mainly used for oil extraction. These have oil content of around 45-50 %. The white seeds have the desirable nutty taste and are used for making sweets, baked foods and confectionaries. The black seeds are used for seasoning and for fries. Hulled seeds are also used for snack preparation.

Around 80 % of the sesameseed production in India, happens during the khariff season (June-July to September-October), with the crop starting to arrive from September. The remaining crop is cultivated in the rabi season (December to March), with the crop starting to arrive from March. An interesting aspect is that, almost all of the seeds from the rabi harvest are used for oil extraction, while the major portion is used for direct human consumption from the khariff harvest.

Sesameseed is largely cultivated in the western and eastern parts of the country. The major producers are Gujarat, West Bengal, Tamil Nadu, Andhra Pradesh, Madhya Pradesh and Maharashtra. Rajasthan is also a major producer, when the area receives sufficient rains. The trade estimation of the percentage contribution of different states to the total production is provided in the corresponding graphs.

Imports and Exports

India's imports of sesameseed have been on an uptrend in the recent years, with increased interest being shown by the exporting nations on this Indian product. More than 25% of the Indian sesameseed production is exported currently. Indian exports in the recent years have been fluctuating from 0.9 lakh tons to around 2.5 lakh tons. The quantity exported depends on the demand - supply situation across all the major importing and exporting countries. The exports are expected to cross 2.5 lakh tons in 2003-04, as while India has had a bumper crop, the Chinese crop is below expectations. This has increased the demand from China and other countries and also pushed up the prices. The main importers of Indian sesame are European countries, USA, Far East Asian countries, and China.

Market Structure

Around 25% of the domestic production is exported as seed, without much processing. However, the exports of hulled seeds is now picking up. The major trading area of sesameseed is located in the Saurashtra region of Gujarat. It is from this area that exports of sesameseed are done. Nhava Sheva (Inland Container Depot, Mumbai), Kandla and Sabarmati (Inland Container Depot, Ahmedabad) are the major ports from where exports of sesameseed from India originate. The Nhava Sheva ICD contributes to around 70% of the total exports normally. The production in Tamil Nadu is typically consumed here itself. 50% of the domestic production is used for the manufacture of sesame oil. In India, sesame oil is consumed as cooking oil mainly in the southern parts of the country, specifically in Tamil Nadu and Kerala. Oil extraction from sesameseed is still largely done by small scale industries. However, there are some major players who sell branded sesame oil in India.

Suitability of Sesameseed for Futures

The product has an active cash market. The commodity is used in several forms and has several uses. This results in it moving between several traders, middlemen, processors, wholesalers, exporters and retailers before it reaches the final consumer. The active movement in the spot market would ensure the viability of a futures contract in sesameseed.

The market size is less for the physical commodity and hence the futures market too would be proportionately smaller than is possible for other oilseeds, viz., soybean or groundnut or mustard in India. However, the price movements of sesameseed do not always follow the trends in other oilseeds as India exports around 25-30% of this oilseed and because of its divergent uses.

The commodity exhibits good price volatility, with a maximum daily volatility of 6.5% exhibited in the previous year.

The grades of sesameseed are well established and the seed exhibits homogenous quality standards within the grade.

Prices Volatility