China's Sesame Seed Imports Witness Significant Decline in 2023
Declining Import Quantity in China
So far into 2023, China's import of sesame seeds has significantly decreased compared with the import volume in 2022. By the end of Aug-23, the total quantity of sesame seeds imported to China witnessed a substantial decline of 30.4% year-on-year (YoY) to 550,681 metric tons (mt). One key factor contributing to this is the increasing prices of sesame globally, especially in African countries, which accounts for over 90% of China’s total imports.
With the depreciation of the Chinese yuan to the United States (US) dollar, importing goods has become more expensive, leading to a significant drop in the traders' motivation to stock up. It has become increasingly important for China to find a sustainable solution to keep a steady supply to meet the increasing demand from the food industry.
Source: General Administration of Customs of the People's Republic of China (GACC)
Weak Supply and Booming Prices
Over the past few years, global sesame seed production has been declining, particularly in African countries. This is due to various factors such as political instability and unfavorable weather conditions. Consequently, sesame production has considerably decreased in these regions, significantly impacting global supply. The production levels in Asia and Eastern Europe have remained stable, but the demand for sesame seed products has been rapidly increasing, especially in the Chinese market, which has boosted the price. Sesame seed is a key ingredient in many Chinese cuisines, and the popularity of these foods is boosting the demand.
In the past eight months, China’s imported sesame seed prices have steadily increased. According to the latest data released by the General Administration of Customs of the People's Republic of China (GACC), the average sesame import price in Aug-23 stood at USD 1,795/mt. It increased by 17.9% compared with the price in Jan-23 and reached a six-year high. According to the local traders, the import price will continue to rise, albeit slower, until the end of this year.
Source: General Administration of Customs of the People's Republic of China (GACC)
Challenges and Opportunities
Despite import declines, China will probably retain its leading position in sesame import in 2023. As the world's biggest sesame seed buyer, the country imported 1.07 million metric tons (mmt) of sesame seeds in 2022, accounting for about 50% of the world’s total import volumes. China’s local sesame seed production is relatively stable at around 450,000 mt annually. Considering the production cost and the limitation of the farmland on non-staple crops, the country is unlikely to expand the planting area in the short term.
Tridge anticipates that the local supply and demand gap will remain at 800,000 mt for the next few years. This presents a great opportunity for top seed producers from African countries such as Niger, Ethiopia, Sudan, Tanzania, and Togo to leverage the global market and increase their exports. China's tariff-free treatment of imported sesame seeds from these countries has made their products highly competitive in the Chinese market.
However, the recent increase in origin prices has gradually reduced their price advantage. Despite this, African sesames are still a very valuable commodity in the market as there are no other sources that can meet China's increasing demand. China must prepare for price fluctuations and take further steps to enhance cooperation with these countries to maintain a steady supply.