Interest rates have been held in both UK & USA, the later against Mr Trump’s recommendation. In the EU/UK, Brexit discussions must recommence, but the general feeling is no one has any appetite or ideas on how to progress. The Euro meanwhile weakens against Sterling.
Otherwise no particular comments to make.
FX Monthly movement
- US$/ £ 1.30 unchanged
- US$/ € 1.11 down
- £/€ 1.16 up
In between seasons now, with the usual market adjustments, stock liquidations, etc. This leads to strong variations in prices, but also in quality of material being supplied, BBE dates etc. Additionally, UK clients are managing their ‘Brexit’ inventory situation, and this is having complications in the market place.
The market has reacted on this product and prices increase by more than 10%. This situation will not improve, since it is driven by tightened supplies of quality raw material. It has led to a significant widening of the spread between A grades and AA grades. Since new crop will not ship until October, these levels will prevail or increase through until physical supply in early 2020.
Stable as she goes! Market is in a stable situation with supply and demand. We hope to see an easier market for 2019 harvest, but it will not be significantly lower in our view.
Uncertain times! African sesame areas are currently facing some uncertainty. The coup in Sudan puts a question mark over steady reliable supply from this area, and the second cyclone hitting Mozambique interrupts supply from here, particularly considering they would normally harvest in June. These factors help support the market. In India we expect the summer crop to arrive in market yards from next week and hopefully lift the current very disappointing delivery numbers. As we have reported through this year India has had to rely on African imports for this season. The extent of this has been as follows:
|Indian sesame imports- Jan-Feb||4,910mt||29,870mt|
|Indian sesame exports -Feb only||28,904mt||21,802mt|
China demand stays strong, with supplies coming mainly from Niger & Sudan currently. So as usual there is sesame in the market place, but in the wrong location or challenged with supply conditions.
Central America is mid-season, so nothing material developing in the region. Availability of material is tightening, aandh there have been some challenges on quality with some consignments recently having issues with pesticides. This has led to a firming of prices.
Supply issues are resolved from USA, now the thaw has occurred, so we see no issue on supply, and expect a decline in pricing once the Eastern European supplies start in the autumn.
We are waiting for the planting figures for the EU regions, but we are expecting an overall decrease in area compared to previous seasons. The season will depend now on the growing conditions and amount of moisture, which is currently below previous years levels already, threatening a further drought this year, and delaying planting somewhat. Combined with firming mineral oil markets and worries over the rapeseed crop already in the EU it looks like a general firming in markets for the new crop.
Mainly reseller market now, and prices starting to decline somewhat for any old crop stocks. Eyes turn to new crops which are expected to be good, but obviously weather dependent. Carry over will be zero, so prices will not decline immediately as the whole supply chain will need to be rapidly filled first, and buyers will have more pressure on them than sellers.