Indian Sesame Challenges and Prospects for Global Competitiveness

The Indian sesame seed market is currently undergoing significant changes, presenting both opportunities and challenges. Recent projections indicate a surge in sesame seed production in India, particularly during the summer crop season. One key factor contributing to this increase in production is the aftermath of unseasonal rains during the previous kharif growing season, planted between June and July and harvested in October and November. The unexpected rain damage led to a drop in production and tighter supplies. Farmers, enticed by higher prices, responded by planting more sesame seeds during the summer growing season, typically from January to March, with harvests occurring from April to June. After a decrease in production during the previous season, Indian sesame seed production for Marketing Year (MY) 2022/23 is expected will reach 800,000 metric tons (mt), reflecting a 1.48% year-on-year (YoY) increase.

Source: The Indian Department of Agriculture & Farmers Welfare

However, amidst the promise of higher production, Indian sesame seed exports faced some challenges. India ranked as the 4th largest exporter of sesame seed in 2022, shipping a total of 234,764 mt of sesame seed, with China as the major destination for Indian sesame seed. While China significantly increased its Indian sesame seed imports in the first half of 2023 by 10% YoY to 10,317 mt, Pakistan has also emerged as a competitive market in the Chinese market. This competitive landscape underscores the importance of India not only enhancing production but also diversifying its market destinations and effectively addressing quality and regulatory concerns to maintain its market share.

Quality and contamination issues have been persistent challenges affecting Indian sesame seeds in the global market. Historically, the European Union (EU) represented a major destination for Indian sesame seeds, with 65,000 mt of Indian sesame seed for nearly 50% of the EU’s direct imports from producing countries until 2020. However, EU sesame imports from India witnessed a substantial decline of 67% YoY to 22,000 mt due to quality issues in 2021. Belgian authorities detected ethylene oxide in Indian sesame seeds, a substance prohibited in the EU food products in Sep-20. Presently, stringent EU regulations mandate rigorous testing for Salmonella and pesticide residues for Indian sesame seeds before export, with the requirement of attaching analytical reports to import documents. Moreover, 20% of consignments are subject to testing at EU borders. As a result, other producers, notably Nigeria, Turkey, and Pakistan have capitalized on India's shrinking market share by boosting their exports to the EU.

Source: European Commission

Efforts are currently underway to address these pressing quality and contamination issues to regain market competitiveness. The Indian Oilseeds and Produce Export Promotion Council (IOPEPC) has identified root causes, including a lack of cleaning equipment, infrastructure damage, and hygiene deficiencies among staff. Additionally, India has introduced ethylene oxide treatments to eliminate cross-contamination risks with consignments destined for the EU and to regain competitiveness in the EU market.

Given higher production prospects, Tridge expects further growth of Indian sesame seeds in the upcoming months. To seize the momentum, India has to increase its capacity to address quality standards for export competitiveness. The nation's commitment to meeting stringent quality standards, resolving food safety challenges, and adhering to regulatory requirements will be crucial as it strives to regain positions in international markets in the near future.