Entering the European market for sesame seeds

Sesame is a diverse ingredient and popular with several food manufacturers in Europe. It is also a volatile business with many producing countries worldwide. The main suppliers to Europe are India and an increasing number of African countries. To compete with these suppliers, you must be able to fulfil buyers’ expectations concerning quality and present yourself as a committed sesame supplier.

1. What requirements must sesame seeds comply with to be allowed on the European market?

Sesame seeds must comply with the general requirements, which you can find in the buyer requirements for grains, pulses and oilseeds on the CBI market information platform. You can also use the Trade Helpdesk, which offers an overview of market access requirements for oilseeds per country using HS code 1207409000 for sesame seed.

What are mandatory requirements?

Food safety: Traceability, hygiene and control

The most important requirement for sesame seeds is to make sure it is safe for consumption. Food safety and traceability should be your top priority. Non-compliance can lead to temporary import stops or to stricter control from your origin country. As a supplier, you must make sure to work according to the guidelines of Hazard Analysis and Critical Control Points (HACCP).

Sesame seeds can be consumed raw or used for further processing. This means you must pay extra attention to control the levels of pesticides, contaminants and microbiological criteria.

A major concern is salmonella contamination. Recently, a new type of Salmonella serotype was found in sesame products in four European countries, reaffirming the need for further health controls. The most recent Regulation (EU) 2019/1793 on temporary increase of official controls and emergency measures requires a control frequency of identity and physical checks for salmonella for 50% of sesame seeds from Nigeria and 20% of sesame seeds from India.

Aflatoxins is also a common hazard for sesame seeds. The European Commission provides clear information on aflatoxins, which must be monitored and remain below the maximum levels (see table 1).

Table 1: Maximum allowed levels of aflatoxins in oilseeds (including sesame seeds)

	Maximum levels (μg/kg)
Aflatoxins	B1	Sum of B1, B2, G1 and G2	M1
Groundnuts (peanuts) and other oilseeds and processed products thereof, intended for direct human consumption or use as an ingredient in foodstuffs, with the exception of: — crude vegetable oils destined for refining — refined vegetable oils	2.0	4.0	-
Groundnuts (peanuts) and other oilseeds, to be subjected to sorting, or other physical treatment, before human consumption or use as an ingredient in foodstuffs, with the exception of: — groundnuts (peanuts) and other oilseeds for crushing for refined vegetable oil production	8.0	15.0	-

Source: European Regulation (EC) No 1881/2006 setting maximum levels for certain contaminants in foodstuffs

Another main point of attention are pesticide residues. Sesame seeds must stay within the limits of the Maximum Residue Levels (MRLs) allowed by European regulation and organic sesame should not have any chemical traces. In some countries such as Germany, buyers are very alert for (excessive) pesticide residues.

Labelling of allergens

The protein in sesame is an allergen and can potentially be dangerous for a small number of consumers. When you pack your product directly for consumption, additional labelling is required to inform consumers. Allergens are highlighted in the list of ingredients.

Packaging

The packaging of sesame seeds must be suitable to protect the product and must be conform to the Regulation (EC) No 1935/2004 on materials and articles intended to come into contact with food.

Common packaging for sesame seeds are 25kg polypropylene bags or multi-layer paper bags. For larger industrial users, big bags of around 1 ton can be used.

What additional requirements do buyers often have?

Quality standards

There is no official quality standard for sesame seeds and the quality will depend on the requirements and specifications of your buyer. Different buyers and market channels may require different quality grades.

The quality is mainly determined by colour, purity and seed quality and size. Attention should also be drawn to insect infestation, excrement residues and other external sources such as metal and plastic pieces. Sesame seeds must not have an odd odour.

Table 2 provides an indication of a minimum and a high grade for sesame seeds (other grades can be in between). For the processing to sesame oil, the physical appearance is less important and seed colours can be mixed. For an example overview of premium, standard and lower grade quality standards, see the offer of the Indian company Sheetal Industries.

Table 2: Indicative grading for minimum- and high-grade sesame seeds

	Minimum grade	Highest grade
Purity	>97.00	>99.98%
Foreign material	<3.00%	<0.02%
Moisture	<5-6%	<5%
Colour differentiation	<3.00% / mixed	<0.02%
Damaged or broken grains, cortical damage	<10.0%	<0.4%
Oil content	>48%	>52%
Immature kernel	<0.50%	<0.30%
Free fatty acid (FFA)	<2%	<1%

Source: Industry sources

Certifications as a guarantee

As food safety is a top priority in all European food sectors, you can expect most buyers to request extra guarantees from you in the form of certification. Food management systems and certifications that are recognised by the Global Food Safety Initiative (GFSI) are widely accepted throughout Europe. For sesame processors (hulling, sorting and packing) a recognised food safety management system is a necessity to become a supplier to European buyers.

• If you are a supplier of sesame seeds, you may find one of the following certification schemes useful, depending on the role you play in the supply chain (production, distribution or processing): GLOBALG.A.P. (agricultural production);
• Food Safety System Certification 22000 (FSSC 22000 /ISO 22000);
• BRCGS for Food Safety (British Retail Consortium);
• IFS Food Standard (International Featured Standard).

Organic certification

Organic certification is a requirement to satisfy the growing demand for organic products. Germany, France and Italy, which are significant buyers of sesame seeds, have the highest organic retail sales in Europe. According to the 2019 report of FiBL & IFOAM Organics International, the market share of organic food in these countries ranges between 5.1% (Germany) and 3.2% (Italy). The organic share in global sesame production area was (only) 1.1% in 2017.

Organic sesame can be an interesting ingredient for several food manufacturers, for example in organic bakery products and snacks. However, the use of sesame in many bakery products is very minor and a product can be labelled as organic if 95% of the ingredients are organic, so bakers and food manufacturers do not always require organic sesame seed to produce an organic consumer product.

In order to market organic products in Europe, you have to use organic production methods according to European legislation and apply for an organic certificate with an accredited certifier. Note that, starting January 2021, the new legislation Regulation (EU) 2018/848 will come into force.

Sustainability and social compliance

Corporate social responsibility (CSR) and sustainability are growing in importance in the oilseeds sector. This can also be seen among companies handling sesame seeds. Adopting codes of conduct or sustainability policies related to environmental and social impacts of your company can provide you with a competitive advantage.

Leading companies on the oilseed market such as OLAM have sustainability policies emphasising the contact with producers, transparency in their operations, as well their social and environmental impact. As an exporter you are part of the supply chain and share this responsibility.

Buyers will often have you fill in a set of documents and declarations before doing business or ask you to comply with a code of conduct. Applying standards and certifications will help you fulfil the expectations of buyers. Initiatives or certification schemes that can help improve your CSR performance, include:

• The Business Social Compliance Initiative (amfori BSCI), implementing the amfori BSCI code of conduct;
• The Ethical Trading Initiative (ETI);
• Sedex Members Ethical Trade Audit (SMETA)
• GlobalG.A.P. and GlobalG.A.P. Grasp

What are the requirements for niche markets?

A consumer label for fair trade practices, such as Fairtrade International and Rainforest Alliance, is a niche requirement in the sesame business for which you need very specific buyers.

The Fairtrade minimum prices for sesame seeds (FOB in September 2020) is 1190 USD per tonne for conventional and 1300 USD per tonne for organic seeds. Both have a Fairtrade premium of 220 USD per tonne.

2. Through what channels can you get sesame seeds on the European market?

Sesame is used in a wide range of prepared food, bakery and confectionery products, each segment with their own specific needs. An experienced importer will be the best first step in introducing your sesame seeds onto the European market.

How is the end-market segmented?

Food grade sesame

Sesame is a widely used ingredient that can primarily be found back in the food industry. The food industry uses sesame seeds for bakery, biscuit & confectionary, snack, health- and ethnic food.

According to an infographic on the European sesame market by Fortune Business Insights, Food Processing is the main segment for sesame with 35.7%. Other large segments are the confectionery and baking industry, followed by the seed use for oil extraction. Part of the sesame seeds are packed for home use, although it often takes a specific type of consumer to offer sesame seeds standard on the shelves.

Different market segments may have their own specific needs. These needs will depend greatly on the end-product the seed will be used for. For example, for tahini, sesame seeds are normally roasted and a sweet taste and aroma are highly preferred. For oil-making, the oil content and clarity plays a bigger role. For topping on bakery products or consumer-packed sesame the physical appearance and purity level are more important. Whole seeds are usually of premium quality, and sometimes extra-white aqua-hulled seeds are used for the topping of bread buns.

Figure 1: European market segments for food-grade sesame seeds

Source images: Pixabay

Non-food uses

The non-food use of sesame is rather small. The cosmetic and pharmaceutical industries use smaller quantities considering the minor crushing activities and sesame oil import according to the 2019 statistical data of Fediol (the European vegetable oil and protein meal industry association). Secondary quality sesame can function as animal feed such as birdseed.

Through what channels does a product end up on the end-market?

Sesame often enters the market through importers and brokers that handle bakery ingredients, seeds and grains or organic food ingredients. Before sesame reaches the end-consumer, most of the seed has been processed into manufactured food products, giving bakeries and food manufacturers a relevant position in the supply chain.

Importers or traders

Generally, sesame seeds are imported into Europe by traders of ingredients. They have an important role in checking the quality and food safety specifications of the product, as well as in the distribution to smaller users and resellers. Most importers have good contacts in producing countries or are even integrated with the primary processing or production, such as Olam in Nigeria, Dipasa in Mexico or Tradin Organic in Ethiopia.

Importers can be specialised in bakery ingredients or general seeds and grain products, as well as in health or organic ingredients. Some of these companies have additional processing and packing facilities to fulfil the needs of food manufacturers, food service suppliers and food brands.

Examples of sesame seed importers in the main European markets are:

• Dipasa - Netherlands
• Olam – International
• H.A. & Gustav Küchler - Germany and SIGCO - Germany (Acomo Group)
• Tampico Trading - Germany

• Partner Trade – Poland
• Voicevale – United Kingdom

Some importers are specialised in the market for organic food ingredients, for example:

• Tradin Organic – Netherlands
• Do-It – Netherlands
• Rapunzel - Germany

Brokers

Sometimes agents or brokers are involved, such as Van der Does Spices (Netherlands) and Anabela Foods (Germany). Brokers are often individuals or small companies that link your product to buyers in Europe and take a commission on the sales. Their function is purely commercial, and as a supplier, you will remain responsible for most of the logistical process.

Food manufacturers

Food manufacturers use sesame seeds as an ingredient to produce all kinds of (food) products. These actors need a reliable supply chain and stability, so they often work with medium- or long-term contracts. For many of these companies, sourcing of different ingredients is not their core business so they use the service of importing companies. With manufacturers that use sesame in large volumes or as a major ingredient in their business, direct contracts with producers can be made as well.

Major food manufacturers are for example:

• Haitoglou Family Foods - Greece; According to Haitoglou Family Foods, they are Europe's largest sesame processor, producing and exporting a wide range of sesame products such as tahini, sesame butter, halva, fruit-nut bars and sesame oil.
• Barilla Group - Italy; Producer of pasta and bakery products with crispbread brands such as Wasa.
• Bioveri - Poland; One of the bigger organic ingredient importers in Poland, and producer of organic sesame bars and halva (also a popular snack in Poland).
• Pedon - Italy, a packing company and food developer of grain, seed and pulse products;
• Intersnack - Netherlands; Producer of snack brands and private labels and semi-finished products.
• Ekibio Groupe - France; a multi-brand food company that markets organic brands with a story.

Figure 2: European market channels for sesame seeds

What is the most interesting channel for you?

For exporters that are new on the European market, it can be a challenge to squeeze into the established trade relations. Sesame is a bulk ingredient and the market is dominated by large international traders and ingredient companies. The best way is to find a specialised importer or broker of (healthy) seeds and food ingredients that is willing to expand their supplier network. If you are dealing with smaller volumes or when you are specialised in sesame seeds, importers or brokers are quite often the most suitable entry point. 

Food manufacturers and food brands can be your next target group once you have proven yourself as a reliable and stable supplier. To deal with these food manufacturers, your business must be service-oriented with a wider product assortment, and preferably an international presence.

3. What competition do you face on the European sesame seed market?

Sesame is a bulk product with widespread production throughout the world. Large and integrated companies are dominant, but there is room for medium sized companies that present themselves well and that keep focus on price and quality in a strongly fluctuating market.

Which countries are you competing with?

India is the main competitor in sesame seeds to Europe, followed by Nigeria and Sudan. While India has not been able to fulfil the European demand in recent years, African countries have gained market share. Sesame is being produced by many countries, diversifying the number of potential competitors. Differences in product quality, price, level of integration and climatic circumstances can shift the competitive advantage from one country to the other.

What did early COVID-19 do to the competition?

Despite the shift in sales from restaurants to retailers, most western European countries maintained their supply chains as much as possible. Most problems came in producing countries such as India and Ethiopia. In some countries, this caused a (temporary) shift in trade flow. For example, in Greece, the import from India showed a dip in May when India and many of the hulling companies had shut down due to COVID-19. Import from Ethiopia and Nigeria also declined, while Sudan and Turkey took over.

India: Responsible for half the European sesame import

India is the largest supplier of sesame seeds to Europe, accounting for nearly 50% of Europe’s imports coming directly from producing countries. The supply volume in the last five years has been stable between 62 and 65 thousand tonnes. The main European import from India in 2019 was registered by the Netherlands, Greece and Germany, each with a volume of between 8.5 and 10.9 thousand tonnes.

India is both a consumer and exporter of sesame seeds. The country has two harvest periods and is capable of producing and processing large volumes of sesame. It offers a wide range of qualities, and for the European market, it concentrates on the export of hulled sesame seeds.

The actual production volume and export to Europe depend on crop quality and availability. Farmers often have to deal with difficult climate conditions (floods and heavy rains), resulting in a lower harvest. Additionally, India (as well as Nigeria) faces serious reputation problems and tighter controls due to contaminated sesame seeds.

India will continue to play an important role in the sesame trade with Europe, although Africa is becoming a good alternative with increasing sesame volumes.

Nigeria: Price competitor

Nigeria has become a price-competitive supplier of sesame seeds and is trying to further boost its production.

Most of the production still depends on smallholder farming, which results in variation in quality as well as quality issues. However, knowledge and seed quality have been improving, partly with the guidance and investment of companies such as Olam. Since 2016, Olam has been running a programme to support sesame growers, providing certified seeds, inputs and credit. With the active sourcing activities of Olam in Nigeria, farmers are able to secure part of their crops for the international market.

Nigeria was the second-largest sesame supplier to Europe in 2019 with a volume of 19 thousand tonnes. Germany (6.9 thousand tonnes), Greece (5.5 thousand tonnes) and Poland (2.9 thousand tonnes) were the principle buyers in Europe.

Considering the growth potential of Nigeria, the country may become Africa’s largest sesame producer. However, since 2013, the export to Europe has not increased as Nigeria is still struggling with restrictions. The European Union checks 50% of all the sesame seeds from Nigeria, which drives up the price for importers. Other major challenges are the logistical congestion and delays in the ports.

Sudan: Fluctuation and uncertain future in sesame

For Sudan, the main European market is Greece, which imported over 12 thousand tonnes of sesame seeds from Sudan. Pricewise Sudanese sesame seeds are comparable, or even lower than those from Nigeria.

According to the highlights of the world sesame convention in 2019, the cultivation area has increased from less than a million hectares in 2011 to an estimated 4.8 million hectares in 2019. The production will continue to fluctuate due to climatic issues and political problems. Its overall exports declined in 2018/2019, mainly due to political unrest, leaving it with an unsure future.

Uganda: Potential as organic producer

Uganda has the advantage of a favourable climate, two annual production seasons and a high-quality sesame seed. Sesame seeds in Uganda have a high oil content and have good potential for organic cultivation, while the use of agrochemicals is nearly non-existent.

A chemical-free production provides Uganda with better access to European buyers, especially in northern Europe. From the 4.8 thousand tonnes imported by Europe, the largest share was imported by the Netherlands and Germany. Smaller volumes were imported by Belgium, Switzerland and France. Most Ugandan export to Europe is raw seeds for the cuisine and confectionery industry.

Still, Uganda also remains a country with challenges, mainly in the organisation of the sesame sector. Non-governmental organisations are involved to improve this. For example, the Commercial Agriculture for Smallholders and Agribusiness (CASA) Programme introduced a sector strategy for sesame in Uganda. The strategy aims to improve the coordination in the sesame sector and their access to international markets.

Ethiopia: Suffers from the impact of COVID-19

The European Union imported 4.7 thousand tonnes of sesame seeds from Ethiopia in 2019, of which half went directly to Greece. Unlike other major African suppliers, and despite large buyers such as Tradin Organic becoming more active in Ethiopia, Ethiopia did not increase its volume to Europe. Its main destinations remain countries in Asia and the Middle East.

Until 2017, Ethiopia easily exported up to 300 thousand tonnes. In 2018, the volumes decreased drastically to less than 200 thousand tonnes. Among the reasons for this decreasing export are higher domestic prices, declining productivity, contract defaults and lack of financing.

More recently, the Ethiopian sesame sector also suffered from strict government restrictions concerning COVID-19, reducing the availability of labour and logistical movement. According to a quick assessment by Wageningen University & Research, COVID-19 implications are threatening the Ethiopian sesame sector and will have a negative effect on the costs and revenues in the sesame trade.

Guatemala: Superior in quality

Guatemala is not among the top producers of sesame seeds, but it is a favourable supplier to Europe due to its good seed quality. Of the key suppliers to Europe, it achieves the highest price (export value per kilo) – almost a quarter higher than India.

According to the exporter Imexa, Guatemalan sesame is recognised as one of the best varieties in the market because of its organoleptic characteristics (taste, smell, appearance), such as its almond flavour and aroma, pearly white colour and large grain size.

The seeds are very suitable for the European demand of sesame as a garnish and in bakery products. The export to Europe is gradually expanding and reached 4.6 thousand tonnes in 2019. Germany (2.7 thousand tonnes) and the United Kingdom (1.1 thousand tonnes) were the main buyers. Practically all sesame seeds to Europe are hulled seeds.

Which companies are you competing with?

International buyers are often well integrated with their producing suppliers. To participate successfully in the European sesame trade, you must present your company well and focus on quality. Examples of competitors that are doing this are Sun Agro in India and Dabeth Industries in Nigeria. Basic processing can help you differentiate as well.

Sun Agro - India

Companies that achieve to build a good reputation can become strong competitors. A good start to do this is through a good presentation of your company.

The company Sun Agro is one of the sesame exporters in India. This company is extremely accessible online with a modern website in multiple languages, and presents itself as a company with an international presence. Their online communication about their attention for social impact and food standards such as BRC fits the expectations of European buyers.

By offering a variety of sesame products such as sesame flour, paste and roasted sesames, they are widening their market potential. However, most of Europe’s demand will be the raw or semi-processed sesame.

Dabeth Industries - Nigeria

Another important focus point as a competitor is quality. Selling a quality product is necessary to reach the right market channels.

The Nigerian company Dabeth Industries stresses their uniqueness in purchasing and shipping only fresh crops. The company works with a network of farmers and farmer cooperatives and has their product checked and certified by international inspection companies.

This way, the company can reach seed crushers who extract sesame oil and other channels such as bakeries, confectioners and food manufacturers who use sesame to make Tahini, Halva, buns, breads, biscuits and other food products.

Which products are you competing with?

Typical traditional recipes and foods such as sushi, tahini and halva require sesame, so there is a consistent demand from the food industry. But in new product development, sesame will be competing with other oilseeds such as linseed or chia, which are better known or more promoted for their health benefits.

4. What are the prices for sesame seeds?

The price you receive for sesame seeds depends on the international market prices. Especially producing suppliers such as India (and increasingly Africa) and major consumer markets such as China have a strong influence on the international price. Depending on the supply circumstances the market price can fluctuate up to 25 to 30% annually.

As an exporter, you must be able to maintain a similar price level as other suppliers with the same grade of seed quality. In Europe, quality and compliance are often important attention points before purchasing or negotiating a price. The final price will depend on the origin and the quality of the seeds.

Since 2012, the sesame trade has become more volatile. Some of the reasons for the volatile market are:

• Varying yields and unpredictable production volumes due to increasing climatic difficulties
• More competition from African suppliers
• A developing global demand
• Price speculation

After a shortfall in India in 2013, sesame prices peaked early 2014 at just over 3,000 USD per tonne for hulled sesame seeds, but prices settled in the higher 2,000 USD range. In the years that followed, production recovered and the price level dropped again to 1,100 to 1,500 USD per tonne (FOB) for hulled seeds and a temporary drop for natural (unhulled) seeds below 1,000 USD per tonne.

In 2018-2019, the crop of Europe’s main supplier India decreased significantly, pushing up the prices. Natural seeds sold for somewhere around 1,600 USD per tonne and hulled seeds close to an average of 2,000 USD per tonne. More recently, production volume has improved, but the forecast of a very high supply was less dramatic than expected.

The COVID-19 pandemic in 2020 has raised fears of market instability. It affected the demand due to the reduced business of restaurants and small bakeries, and lockdowns in China, India and Africa have had a strong influence on the international trade flows. However, so far, it seems to have had little effect on the sesame prices and supply and demand are in more or less in balance.

There is a possibility prices will go down, especially for old stock. According to the blog of Mr. Mukul Gupta, the director of Shakumbhri Expo Impo Ltd in India, prices are expected to remain between 1,000 and 1,400 USD per tonne for natural seeds and 1,500 to 1,750 USD per tonne for hulled seeds.

Figure 6: Average trade value of imported sesame seeds into the European Union

Source: Market Access Database

The importer’s margin is somewhere between 15 and 20% to cover import costs and sales margin. The sales prices by wholesalers and retailers vary greatly, often not only depending on the quality, but also on the package size and brand marketing.

Just like other seeds and condiments, sesame can be packed in small consumer packages and marketed among high-priced nuts or spices. This way, the retail price can go up to well over 24 euros per kilo for the small packages (<1kg), making the retail margin very high. Sesame sold as a spice in a small bottle (<50g) can even be retailed for 40+ euros. For larger packages to food service providers, the prices range between 3.5 and 5.5 euros per kilo.

Table 3: Indicative sales prices per channel for hulled sesame seeds, in euros per tonne (estimation 2019)

Exporter (FOB)	1,700
Importer / distributor	2,250
Wholesaler (5 - 25kg bags)	3,500 – 5,000
Retailer (up to 1 kg)	5,500 – 24,000 (or more when sold as a spice)

This study has been carried out on behalf of CBI by ICI Business.

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