Sesame Market Update - 02 April 2020

The Sesame Market is seeing a number of COVID-related S&D disruptions. Port closures in India and Africa will affect global availability over the coming months, as these are some of the leading exporters of Sesame.

In China, things are returning to normal. With restaurants now operating as they were before the onset of COVID, Sesame consumption will normalize. There is a significant amount of stocks in Chinese ports, which could affect their demand for imports in the short term, but ultimately will expect this to balance out as these stocks dwindle and the supply tightness due to port closures increases.

There is an expectation that India’s sowing for summer crops will be delayed due to lockdown, which could add more pressure to the supply side, even after we see some relief from COVID-19 related disruptions.

In the US & Canada, forecasting demand in the bakery sector is cloudy. Some of the core sectors for sesame such as QSR are operational but slower and summer bun consumption could be affected as well. The North American Tahini market is gearing up for one of its busier seasons heading into Ramadan, which has made for significant demands on uncertain supply. The effects of port closures worldwide haven’t reached the US market just yet, but the expectation is for this to affect availability to June and beyond depending on bottlenecks at US ports once shipping resumes as usual. Expect an increase in spot purchases to cover delayed imports from India & Africa. Olam has established some contingencies to ensure we can cover these types of requests for shipment in April and May while others will not be able to export.

The tightness on supply will support higher prices for the foreseeable future. The timeline for relief is very unclear at this point.

Possible Scenarios

Bullish

• Supply Chain disruptions will continue to limit availability worldwide

Bearish

• Some demand could be curbed in the short term due to COVID-19, which could keep pricing in check to some degree