Sesame Seed Exports To Russia Likely To Be Affected

Kolkata: Even though the Russian authorities have provisionally (subject to conditions) lifted the temporary restrictions on import of Indian sesame seeds into that country, the problem for Indian exporters still remain because of the delay in procurement of pre-shipment testing certificates (of samples) from the single approved national laboratory.

Trade sources blame the delay on dependence for such certification on a single designated lab. A leading Gujarat-based exporter, fearing cancellation of his order by the Russian buyer of sesame seeds because of the delay in issuance of quality test certificate, has sent an SOS to Shellac and Forest Products Export Promotion Council (Shefexil) to either arrange for another accredited lab or convince the Russian authorities through the Government of India channels to approve and enlist a few more nationally accredited testing labs.

Immediate necessity

Two basic conditions that now need to be fulfilled by Indian exporters are, a) sesame seeds from GMP (genetically modified plant) sources shall not be exported to the Russian Federation; b) Each consignment of sesame seeds shipped shall be accompanied by a quality test certificate of Shriram Institute for Industrial Research for each lot.

The Shellac and Forest Products Export Promotion Council had suggested that the export policy for sesame seeds may be suitably modified to ensure that exports of the commodity to Russia may be permitted subject to a health certificate issued by the Export Inspection Council (EIC), based on a laboratory test report Shriram Insttitute for Industrial Research or any other agencies, as may be notified from time to time.

A Russian delegation, in India some months ago at the invite of Indian authorities to check out the accredited national labs for testing of export quality sesame seeds, had provided a copy of the model quality certificate for sesame seed and wanted the Indian labs to follow it while issuing the certificate.

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Following a closed door meeting with members of the visiting Russian inspection team, an approved format of the certificate of sesame seed quality was forwarded by the APEDA to the Indian Embassy in Moscow for formal acceptance of the Russian authorities.

It is learnt that at the said meeting, the Russian delegation had also recommended the name of Vimta Labs of Hyderabad.

The letter of assurance for export of groundnut and sesame seeds to the Russian Federation was signed on September 7, 2007, after the Protocol for rice export was initialled on July 10, 2007.

According to informed sources, the full compliance details of the commitments by the Indian side have already been submitted to the Indian Embassy in Moscow, for being forwarded to the Russian side.

The deadline for groundnut and sesame seeds was January 7, 2008.

Sesame Seed Exports Likely To Take A Hit

Kolkata: India, a top exporter of sesame seeds after Ethiopia and China, may lose this status soon, going by the current plight of Indian exporters, pummelled by a cash crunch on the one side because of rupee appreciation, and a steep hike in domestic prices of the agri commodity in producing States, on the other.

Supply shortfall

Exporters, facing a situation of involuntary default in supplies, are in danger of losing the overseas markets at a time when global demand for sesame seeds (particularly white sesame seed) has witnessed a spurt owing to substantial crop shortfall in two of the major producers – China and Ethiopia.

Deficit in output

Some leading eastern region exporters say India too has suffered a shortfall in crop owing to weather conditions (to the extent of 25 per cent), directly contributing to the big hike in quintal price in the last one year or so.

According to Rajkumar Beriwal of Balaji Overseas, price of white sesame seed in Madhya Pradesh has shot up from Rs 2,900 per quintal last year (2006-07 May crop) to Rs 5,200 this year.

Indian price of sesame seed now, according to trade, was higher than the Chinese and Ethiopian quotes by nearly $50 a tonne.

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Pointing out that the price situation, combined with the high cost of funds for exporters, was fast rendering the situation unsustainable, he said the f.o.b. price per tonne (for October forward contract delivery) has shot up from $950 to $1,500. He feared a situation when some 60 per cent of the exporters may default on contracted supplies if the situation is allowed to persist for some more time.

Asked what needed to be done, he said there was now a strong case for re-inclusion of sesame seeds (in Appendix 37A, HBP Vol. 1) for duty credit benefit under the Vishesh Krishi Gram Upaaj Yojana (VKGUY) of the Government of India.

It is felt that the erstwhile VKGUY benefit should be immediately restored as otherwise Indian exporters will be forced out of their traditional markets such as Korea, the US, Taiwan, New Zealand, Germany, Greece and Turkey.

The nation’s average annual forex earnings through sesame seed export are put at between Rs 750 crore and Rs 950 crore. The volumes are said to be around 23,000 tonnes, accounting for some 25 per cent of world trade in sesame seeds.

According to P.K.Shaw, Chairman of the Shellac and Forest Product EPC, sesame seed was withdrawn from the erstwhile VKGUY Scheme in September 2005 as the product was not a forest produce, but an agricultural commodity.

He said some of the other factors affecting exports were growing competition from China and Ethiopia, and loss of cultivation owing to floods in the sesame growing States such as Maharashtra, Rajasthan and Gujarat.