The Hindu Business Line : Sesame oil prices ruling firm on lower output fears

Chennai, Dec. 23 At a time when prices of almost all vegetable oils are declining, sesame or til oil has been an exception. In fact, prices of products such as palm oil are ruling lower than in 2006 but in the case of sesame oil, the rates are higher than the same period a year ago.

In Mumbai, sesame oil was quoted at Rs 720 for 10 kg against Rs 640 during the same period last year. In fact, prices were ruling at Rs 740 a week ago.

“Sesame oil prices are ruling higher than last year and not declining when other oils prices are down because production of sesame is lower this kharif season. Also, there are consumers who prefer to buy sesame oil,” said Mr B.V. Mehta, Executive Director of the Solvent Extractors’ Association of India.

In Chennai, sesame oil is being quoted at Rs 100 a kg, while in the retail market consumers complain of the prices being nearly Rs 150 a kg. However, Mr Mehta said prices could be so high only in the case of branded ones and not wholesale.

Lower Output

During the current kharif season, sesame seed production is estimated at three lakh tonnes (lt) against 4.5 lt last year. While production is seen higher in Rajasthan and Gujarat, it is estimated to be lower in other growing States, particularly Madhya Pradesh and Uttar Pradesh.

In Madhya Pradesh, the production is projected to be 40,000 tonnes against 1.2 lt last year, while in Uttar Pradesh it is estimated to halve to 40,000 tonnes. Among other States, it is expected to halve to 10,000 tonnes in Tamil Nadu and be just one-third in Karnataka at 10,000 tonnes.

Exports

Trade sources said one more reason for sesame prices ruling firm could be the fact that a small quantity of sesame seed had been exported. “The quantity exported may be insignificant but still it could have added to the senitment,” they said, adding that perhaps, the Centre’s decision to allow exports in smaller consumer packs could have also aided the trend.

When edible oils export was banned last year, there was, in particular, demand to allow export of sesame oil from South India to target markets in Malaysia, Singapore and Far-Eastern countries besides West Asia. In the South, sesame oil is preferred more for use in pickles and chilly powder for idlis and dosas.

At one point of time, India is the largest exporter of sesame seed, shipping out over 1.5 lt against domestic production of nearly 7.5 lt. During 2007-08 season that ended in October, sesame seed production has been pegged at 6.6 lt.

Prices below MSP

Meanwhile, prices of oilseeds such as groundnut and sunflower are hovering or are lower than the minimum support price (MSP) fixed by the Union Government.

Prices of groundnut are ruling between Rs 1,600 and Rs 2,400 a quintal against the MSP of Rs 2,100, while that of sunflower is between rs 1,900 and Rs 2,500 against the MSP of Rs 2,215. Prices of soyabean are, however, much higher at over Rs 1,800 a quintal against the MSP of Rs 1,390.

“Soyabean prices are higher than MSP because the Centre has imposed 20 per cent Customs duty on soyabean oil imports, while futures have also resumed,” said trade sources.