Ethiopia exported 288,752 tons of sesame in the past ten months earning USD 466.44 million in revenue.
In the same period last year, the high global demand for sesame led to USD 693.5 million in revenue for Ethiopia, which exported 346,833 tons of sesame seeds. This year’s export marks a USD 227 million (or 24.3 percent) revenue drop.
The drop in revenue was caused by an excess of sesame supply and falling prices in the global market, combined with poor local sesame quality caused by bad weather, hoarding of seeds by farmers, and a limited number of export destinations.
China, the world’s largest importer of sesame and buyer of 64.5 percent of Ethiopia’s sesame seed export, decreased its import of Ethiopian sesame, having met its demand through imports from India and local production. According to the Ministry of Trade, sesame is currently sold at USD 1,300 per ton, down from USD 2,000 to 2,400 per ton last year.
Mulugeta Seid, Crops Market Director at the Ministry of Trade, told Capital that farmers hoard sesame anticipating better prices.
“Many farmers were tricked by last year’s inflated prices and held on to their yields hoping for higher profits. However, their calculations were misguided. Consequently, other global sesame producers were able to take advantage of the opportunity,” Mulugeta said.
“The most challenging factor was the high supply in the global market that forced Ethiopian sesame exporters to sell below their targeted prices. Additionally, weather fluctuations in India worried the Chinese, who decided to buy Indian sesame earlier than usual. Chinese demand for Ethiopian sesame thus decreased” he added.
According to some reports, in 2015, global sesame consumption is estimated to be 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.
Mulugeta noted that farmers and exporters need to work together to address hoarding and to return to regular sesame export levels in the global market. Exporters in the sesame market blame the government for poor market forecasting and the limited number of export destinations.
An exporter who commented anonymously said, “the country needs to look into other markets because Ethiopian sesame exporters are too dependent on Chinese demand. When Chinese stocks are full, Ethiopian sesame export revenue plummets. If we broaden our market and export to more countries, Chinese demand would have a smaller impact on farmers’ and exporters’.”
According to a report from The Public Ledger, Indian sesame seed production is expected to fall due to worsening weather conditions. Ethiopia may therefore experience rising sesame exports to meet global demand. Ethiopia remains one of the world’s top five exporters of sesame seed.