Just like last year the Met department warned well in advance of a good monsoon this year. Sesame of course is not a water friendly crop so we saw a lot of crop shift during sowing at the start of the season. The sowing is less by about 15-20% as per government data. So at first calculations we can discount that this year's crop will be less by at least 30% compared to last year.
Last week the rains have been heavy and knowing the sesame plants we can surely say the low lying field or wherever there was water logging the damage may have been severe but to put a percentage number on damage as a total would be too hard. Some fields may have been totally wiped off but some fields which survived will probably compensate for the volume losses by increased yields. Now coming to the damage caused by heavy rains in the remaining crop. The trade estimates coming from various people involved put the numbers between 40-50%. That’s a huge number and perfect recipe for the bulls. The new crop is highly unlikely to be available for export before mid of October.
The numbers definitely point towards a bullish year ahead however for all the fundamentals to play out right at the same time is a big ask. Buyers could lose out on a lot of business to their respective competitors if they don't have enough cargo at the right price and the right time to sell or could be stuck with high priced cargo in their warehouses with no takers. Difficult decisions to make which will surely keep all the Buyer's on their toes this time; would be interesting to see how the markets move. The Domestic demand in India has grown substantially over the years and will start during the New crop onwards and remain strong till Mid Jan. Their buying pattern is erratic and irrational with sentiments playing more importance rather than actual consumption sometimes.
Our suggestions as always would be not to be a speculator, the swings could be huge. This suggestion is for both long and short. Stick to good and reputed suppliers and not gamble around much in a year which could be highly volatile.
Your good supplier is just as important as your good client these days, it’s a chain and we are all just links in between so we need to keep the chain strong.”
