Exporters of sesame oil in 5-kg branded consumer packs are now caught in a bind because of a recent Government notification that extends the time allowed for export (of all vegetable oils) till September 10, 2010, without raising the existing quantity of 10,000 tonnes. The quantitative curbs have been in force from November 2008.
Sesame oil accounts for a minuscule share in the total oils quota allowed. Edible oils export was free till March 2008, after which it was banned owing to the domestic price situation.
Uncertain situation
Mr Ashok Agarwal, Director, Edible Agro Products Ltd, an exporter of branded sesame oil, told Business Line; "Sesame oil exporters now face an uncertain situation when they cannot take any new orders because the export quota allowed is nearly exhausted".
He said that already some 8,500 tonnes of edible oils have been exported and the quota would get over by end- October.
Criticising the decision to allow free export of sesame seeds in bulk while restricting the export in branded oil form, which can fetch a higher price in the international market, he said this was only helping the overseas importers of Indian sesame seeds who convert these into valueadded products and sell at nearly $4 a kg.
Sharing this view, Mr V.R.Muthu, Chairman of Virudhunagar- based V.V.V. & Sons, the makers of Idhayam brand oil, said export was the mainstay of South Indiabased sesame/gingelly oil exporters, who carry the commodity to the Tamil diaspora across the world.
He felt such export restrictions on sesame oil, while allowing bulk export in seed form, was inimical to the national goal of sending more value-added Indian products to the global market place.
According to Mr Agarwal, States such as West Bengal, which cultivate the low quality sesame seeds, suffer more as their only hope would be export in oil form.
Tough competition
Mr Agarwal clarified that Indian exporters, under any case, faced tough competition in the global markets in branded sesame oils as export in consumer packs adds to the costs substantially. Mr Muthu, however, pointed out that he was quite comfortable with export of sesame oil in branded 5 kg and smaller packs, as the Idhayam brand was now well established in even developed markets of Canada and Australia. Sesame oil is mainly exported to the USA, UAE, Canada, Australia, Singapore and Malaysia.
Cultivation
He said the West Bengal farmers were not keen to move to the more profitable white sesame seed cultivation because of the export curb. According to him, while farmers in States such as like Gujarat, Rajasthan and Uttar Pradesh UP get Rs 50 to Rs 60 a kg of for white sesame seeds, in West Bengal the poor quality brown seed fetches just Rs 27 a kg. "The inferior quality West Bengal sesame seeds are thus suitable only for crushing, and if export of oil in value-added form is allowed freely, the farmers in the State will get a price above Rs 32 a kg."
Source : Business Line