As we enter the late stages of the sowing season for Indian, West African, and Chinese Sesame, there are an abundance of factors worth commenting on that go beyond the effects of the current COVID crisis.
China – With port stocks still relatively high, the current market is stable. However, China looks to be expecting a lower harvest on this years domestic crop. Heavy rains have affected some of the largest growth areas and it looks unlikely that they will meet last year's production.
India – India has sown 95% of its crop and is reporting an increase in land usage for Sesame. Whether or not this will result in a larger crop than last year is yet to be seen. Signs seem to currently indicate that this crop will be at least as good as last year's winter crop.
Africa – Tanzania and Mozambique have nearly sold through their recent harvests, meaning we are now waiting on the West African crops influence on supply and demand.
Demand – Tahini production in the Middle East will be entering its busy season and China is experiencing some significant relief from the pandemic lockdowns and is seeing increased usage. The EU and US do not seem likely to revert to the kinds of closures experienced in early 2020, so the expectation is for demand to continue rising to some degree.
As port stocks begin to sell down in China over the coming weeks and more information comes out regarding the crops at the previously mentioned origins, we can expect prices to begin moving again. Even with a slight increase in overall crop size, prices are already at a low point and demand appears to be picking up, which would indicate a greater liklihood for pricing increases rather than lowering any further. For the short term, trading is still rangebound, hovering around multi-year lows, meaning pricing is favorable. However, we can anticipate this to change in the coming weeks.