Sesame prices on the Ethiopian Commodity Exchange witness a significant decline, falling over 40% from their peak in September.
Exchange data shows that in early September, sesame prices had reached an all-time high of 15,200 birr per quintal. However, prices have since plunged to 9,000 birr as of today.
The steep drop in prices has major implications as sesame is Ethiopia's main foreign exchange earner, raking in over $250 million annually during bumper harvest years. The current slump raises concerns for farmer incomes and the country's foreign exchange revenues in 2022.
Analysts attribute the price slide to higher production this season, estimated at 800,000 tons, as well as weaker demand from key importers like China and India facing economic headwinds. Growing exports from other African countries using China's duty free access is said to be one reason for the decline in demand from Ethiopia. Tanzania and Malawi are increasingly becoming strong competitors for sesame exporters of Ethiopia. The huge surplus has added pressure on existing stocks.
Officials are worried farmers may plant less sesame if prices fail to rebound, threatening food security and rural livelihoods and incomes. Both the ECX and government are closely monitoring price trends for signs of stabilization in the market. Much will depend on global demand patterns in key importing nations.
The steep decline marks a sharp turn from September's historic peaks and has the potential to impact Ethiopia's crucial sesame sector in the coming months if prices do not recover ground.