Sesame prices near six-year global high
IPPEI TANOUE, Nikkei staff writer
TOKYO -- Sesame seed prices are nearing a worldwide six-year high. The major reason for the hike is thought to be China, which has accelerated a switch from crop production to importing the commodity from other countries.
African sesame seed is used for oil and is a benchmark for international prices. It is currently trading at around $2,200 per ton. The price hit the $2,500 range in 2008 before it sank to around $1,300 in 2012.
A poor sesame harvest for the world's largest producer, India, over the last two years is said to be one reason for the 70% jump in the crop's price. Many market observers also attribute the increase to China's growing imports of the small seed.
China used to be a major exporter of sesame, but the tedious harvesting process, mostly done by hand, discouraged many farmers there from cultivating the crop. Numerous farms have now switched to growing more profitable vegetables. The reduction in domestic yield, along with rising domestic demand for sesame oil, has pushed up sesame imports, making it the world's largest sesame importer.
African crop is key
High sesame prices are also hitting Japan. The yen's recent fall against the dollar is pushing up prices for the seed. According to Japan's trade statistics, the country's import prices for sesame from January to March averaged about 230,000 yen ($2,232) per ton, compared to the yearly average of roughly 210,000 yen in 2008. Yield of the East African variety, which is about to enter harvest season, holds the key to future prices. Many Japanese trading houses and importers forecast sesame prices will stay high.
Japanese sesame oil makers are translating rising import costs of ingredients into shelf prices. Kadoya Sesame Mills, the largest sesame product maker in Japan, will raise prices for business-use products by 12% for shipments from June. Though it refrained from raising prices for home-use products this time, it hinted at a possible future hike. "We will decide based on market developments," said a company official. Nisshin OilliO Group and J-Oil Mills each implemented a 20% increase in their business- and home-use products to be shipped from April and May, respectively.
Japan imports almost all its domestically consumed sesame. In 2013, the nation imported 141,573 tons, down 11% from the previous year, according to trade statistics. The reduction was caused by the rising price of the crop. Consumer demand for sesame products also fell due to increased retail prices.
Japan sources 64% of the sesame it uses to make oil from Africa. However, it has recently expanded imports of white sesame, a variety generally consumed without processing, from the continent to make up for short yields in central and south America. It also imports black sesame from Myanmar and golden sesame from Turkey.
Sesame consumption is not only rising in China. The crop is also drawing strong interest from health-conscious consumers in the Middle East. Global procurement battles over sesame are expected to intensify, making it urgent for Japan to diversity its import sources.