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VIRGO - The Perfectionist
Dominant in relationships. Conservative. Always wants the last word. Argumentative. Worries. Very smart. Dislikes noise and chaos. Eager. Hardworking. Loyal. Beautiful. Easy to talk to. Hard to please. Ha rsh. Practical and very fussy. Often shy. Pessimistic.
7 years of bad luck if you do not forward.

SCORPIO - The Intense One
Very energetic. Intelligent. Can be jealous and/or possessive. Hardworking. Great kisser. Can become obsessive or secretive. Holds grudges. Attractive. Determined. Loves being in long relationships. Talkative. Romantic. Can be self-centered at times. Passionate and Emotional.
4 years of bad luck if you do not forward.

LIBRA - The Harmonizer
Nice to everyone they meet. Can't make up their mind. Have own unique appeal. Creative, energetic, and very social. Hates to be alone. Peaceful, generous. Very loving and beautiful. Flirtatious. Give in too easily. Procrastinators. Very gullible.
9 years of bad luck if you do not forward.

ARIES - The Daredevil
Energetic. Adventurous and spontaneous. Confident and enthusiastic. Fun. Loves a challenge. EXTREMELY impatient. Sometimes selfish. Short fuse. (Easily angered.) Lively, passionate, and sharp wit. Outgoing. Lose interest quickly - easily bored. Egotistical. Courageous and assertive. Tends to be physical and athletic.
16 years of bad luck if you do not forward.

AQUARIUS - The Sweetheart
Optimistic and honest. Sweet personality. Very independent. Inventive and intelligent. Friendly and loyal. Can seem unemotional. Can be a bit rebellious. Very stubborn, but original and unique Attractive on the inside and out. Eccentric personality.
< /I>11 years of bad luck if you do not forward.

GEMINI - The Chatterbox
Smart and witty. Outgoing, very chatty. Lively, energetic. Adaptable but needs to express themselves. Argumentative and outspoken. Likes change. Versatile. Busy, sometimes nervous and tense. Gossips. May seem superficial or inconsistent, but is only changeable. Beautiful physically and mentally.
5 years of bad luck if you do not forward.

LEO - The Boss
Very organized. Need order in their lives - like being in control. Like boundaries. Tend to take over everything. Bossy. Like to help others. Social and outgoing. Extroverted. Generous, warm-hearted. Sensitive. Creative energy. Full of themselves. Loving. D oing the right thing is important to Leos. Attractive.
< face="Arial" color="blue">13 years of bad luck if you do not forward.

CANCER - The Protector
Moody, emotional. May be shy. Very loving and caring. Pretty/handsome. Excellent partners for life. Protective. Inventive and imaginative. Cautious. Touchy-feely kind of person. Needs love from others. Easily hurt, but sympathetic.
16 years of bad luck if you do not forward.

PISCES - The Dreamer
Generous, kind, and thoughtful. Very creative and imaginative. May become secretive and vague. Sensitive. Don't like details Dreamy and unrealistic. Sympathetic and loving. Kind. Unselfish. Good kisser. Beautiful.
8 years of bad luck if you do not forward.

CAPRICORN - The Go-Getter
Patient and wise. Practical and rigid. Ambitious. Tends to be good-looking. Humorous and funny. Can be a bit shy and reserved. Often pessimists. Capricorns tend to act before they think and can be unfriendly y at times. Hold grudges. Like competition. Get what they want.
20 years of bad luck if you do not forward.

TAURUS - The Enduring One
Charming but aggressive. Can come off as boring, but they are not. Hard workers. Warm-hearted. Strong, has endurance. Solid beings who are stable and secure in their ways. Not looking for shortcuts. Take pride in their beauty. Patient and reliable. Make great friends and give good advice. Loving and kind. Loves hard - passionate. Express themselves emotionally. Prone to ferocious temper-tantrums. Determined. Indulge themselves often. Very generous.
12 years of bad luck if you do not forward.

SAGITTARIUS - The Happy-Go-Lucky One
Good-natured optimist. Doesn't want to grow up (Peter Pan Syndrome). Indulges self. Boastful. Likes luxuries and gambling. Social and outgoing. Doesn't like responsibilities. Often fantasizes. Impatient. Fun to be around. Having lots of friends. Flirtatious. Doesn't like rules. Sometimes hypocritical. Dislikes being confined - tight spaces or even tight clothes. Doesn't like being doubted. Beautiful inside and out.
14 years of bad luck if you do not forward.

~Send away!!~ ready ........ set......... ... GO!
1-3 people= 1 minute of luck
4-7 people= 1 hour of luck
8-12 people = 1day of luck
13-17 people = 1 week of luck
18-22 people = 1month of luck
23-27 people = 3 months of luck
28-32 people = 7months of luck
33-37 people = 1year of luck
38 and more = a very lucky life!

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SESAME OVERVIEW

Overview of the
Nigerian Sesame Industry
Prepared by:
Chemonics International Inc. 1133 20th Street NW Washington DC, 20036
Prepared for:
The United States Agency for International Development (USAID)/Nigeria
RAISE IQC Contract No. PCE-I-00-99-00003-00
Task Order No. 812
November 2002
FOREWORD
Under the Rural and Agriculture Incomes in a Sustainable Environment (RAISE) IQC, Chemonics International is working with USAID/Nigeria and the Government of the Federal Republic of Nigeria (GON) to stimulate Nigeria’s economic growth through increased competitiveness in the world market. A key component of this effort centers on determination of specific agricultural products with the greatest potential for increasing foreign exchange and employment. While the project specifically targets increased agricultural commodity production and exports, it also seeks to boost domestic sales as well through opportunistic ‘fast track’ activities, which are loosely based on development of networks and linkages to expedite trade.
At a stakeholders’ conference in Abuja, Nigeria in January 2002, participants identified five Nigerian products that held the greatest potential for export growth. Chemonics was charged with conducting sub sector assessments of these products, and then developing industry action plans (IAPs) for those that indicated sufficient market opportunities.
In preparation for the sub-sector assessments, Chemonics’ compared the relative opportunities in each of the selected sectors, and decided to focus on commodities where the global market was US$1 billion or more, that is, where the market was of sufficient interest for the Nigerian economy. The current global market for sesame is roughly US$500 million. As such, the opportunities for investment in this market are small for Nigeria. Therefore the following is just an overview of the sesame market, rather than and in-depth sub-sector assessment accompanied by an industry action plan.
This overview document examines market trends, opportunities and constraints, both international and domestic; production and processing requirements; operating environment issues; and recommendations to address the needs of the Nigerian industries.
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TABLE OF CONTENTS
EXECUTIVE SUMMARY ............................................................................................................................................. 5
I. THE INTERNATIONAL SESAME INDUSTRY ................................................................................................ 6
A. INTRODUCTION .................................................................................................................................................... 6
B. SESAME PRODUCTS.............................................................................................................................................. 6
C. MARKETS............................................................................................................................................................. 8
C.1. Sesame Seed............................................................................................................................................... 8
C.2. Sesame Seed Oil....................................................................................................................................... 14
II. CURRENT STATUS OF THE NIGERIAN SESAME INDUSTRY ................................................................ 17
A. INTRODUCTION .................................................................................................................................................. 17
B. PRODUCTION...................................................................................................................................................... 17
C. PROCESSING....................................................................................................................................................... 18
D. MARKETING....................................................................................................................................................... 19
E. LOCAL CONSUMPTION ..................................................................................................................................... 19
F. EXPORT.............................................................................................................................................................. 20
III. ENVIRONMENT............................................................................................................................................ 21
A. GOVERNMENT POLICY/INFRASTRUCTURE........................................................................................................... 21
A.1. Federal Ministry of Finance, Budget Office ............................................................................................. 21
A.2. The Nigerian Export-Import Bank (NEXIM) ............................................................................................ 22
A.3. The Africa Project Development Facility (APDF).................................................................................... 23
B. SOCIO-ECONOMIC ISSUES .................................................................................................................................. 24
B.1. Environmental Effects.............................................................................................................................. 24
B.2 Impact on Incomes................................................................................................................................... 24
B.3 Impact on Women .................................................................................................................................... 24
B.4. Geographic Distribution.......................................................................................................................... 24
IV. OPPORTUNITIES AND CONSTRAINTS................................................................................................... 25
A. OPPORTUNITIES.................................................................................................................................................. 25
B. CONSTRAINTS TO OVERCOME ............................................................................................................................ 25
V. CONCLUSIONS AND RECOMMENDATIONS .............................................................................................. 27
APPENDIX 1: SWOT ANALYSIS OF THE NIGERIA SESAME INDUSTRY .............................................. 29
APPENDIX 2: CONTRIBUTIONS...................................................................................................................... 31
APPENDIX 3: PROJECT BACKGROUND........................................................................................................ 32
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TABLES
TABLE 1: SESAME PRODUCTS...................................................................................................... 7
TABLE 2: SESAME SEED PRICES ................................................................................................ 14
TABLE 3 GLOBAL EXPORTS OF SELECTED VEGETABLE OILS ................................................... 15
TABLE 4 CHARACTERISTICS OF SESAME GROWN IN NIGERIA................................................... 18
TABLE 5: ANNUAL AVERAGE PRICE OF SESAME ....................................................................... 19
TABLE 6: NIGERIA SESAME EXPORT FIGURES (UNITS: TONNES) ................................................ 20
FIGURES
FIGURE 1 WORLD PRODUCTION OF SESAME SEED....................................................................... 8
FIGURE 2 TOP TEN PRODUCERS OF SESAME SEED (2001) ........................................................... 9
FIGURE 3 EXPORTS OF SESAME SEED .......................................................................................... 9
FIGURE 4 TOP TEN SESAME SEED EXPORTERS .......................................................................... 10
FIGURE 5: MAJOR IMPORTERS OF SESAME SEED ........................................................................ 10
FIGURE 6 IMPORTS OF SESAME SEED INTO JAPAN ..................................................................... 11
FIGURE 7 IMPORTS OF SESAME SEEDS TO THE EU..................................................................... 12
FIGURE 8 IMPORTS OF SESAME SEED TO SOUTH KOREA............................................................ 12
FIGURE 9 IMPORTS OF SESAME SEEDS TO THE USA .................................................................. 13
FIGURE 10 IMPORTS OF SESAME SEED TO TAIWAN.................................................................. 13
FIGURE 11: MAP OF NIGERIA SHOWING SESAME PRODUCING REGIONS................................... 16
FIGURE 12 SESAME PRODUCTION IN NIGERIA ......................................................................... 18
FIGURE 13 TYPICAL PACKAGING OF SESAME SEEDS IN NIGERIA…………………………...……..18
Rate of Exchange (ROE): $US 1 = N 117
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November 2002 Task Order No. 812
EXECUTIVE SUMMARY
Sesame is an important export crop in Nigeria, and Nigeria has a substantial role in the global sesame trade. Annual exports of sesame from Nigeria are valued at about US$20 million and Nigeria is the primary supplier of sesame seed to the world’s largest importer, Japan. These features are poorly recognized and it is timely to develop support and action to facilitate the continued expansion of this sector.
The position of sesame is not well understood either in Nigeria or in the global trade, and a significantly clearer interpretation of Nigeria’s competitive position and opportunities is essential. The compilation of this report has revealed areas of uncertainty in both, and the formulation of strategy and associated activities is therefore premature. In the first instance, a greater understanding of the position of Nigeria and its options is needed and the following notes elaborate recommendations towards this goal.
Recommendations
1. Appraise and evaluate the research, trials and extension services available to the sesame sector.
2. Investigate opportunities in other markets, with particular focus initially on the oil markets of the Far East, Korea and Taiwan.
3. Explore the possibility of changes in the Korean tendering process.
4. Evaluate the competitive position of Nigerian sesame in the Japanese market and assess the opportunity for increasing market share.
5. In conjunction with recommendation #4, evaluate the opportunity for differentiating. Nigerian sesame for oil users and explore the economics and market potential for pressing sesame in Nigeria on an industrial scale.
6. Appraise the requirements of other sesame sectors.
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I. THE INTERNATIONAL SESAME INDUSTRY
A. Introduction
Sesame seeds (or sesamum or benniseed) are the seeds of the tropical annual Sesamum indicum. The species has a long history of cultivation, mostly for its yield of oil. The original area of domestication of sesame is obscure but it seems likely to have first been brought into cultivation in Asia or India.
The plant is usually 60 to 120cm tall and the fruit is a dehiscent capsule held close to the stem. When ripe, the capsule shatters to release a number of small seeds. The seeds are protected by a fibrous ‘hull’ or skin, which may be whitish to brown or black depending on the variety. 1000 seeds weigh some 4-8g. The seeds have a high oil content of 44-60%.
The plant is deep rooting and well adapted to withstand dry conditions. It will grow on relatively poor soils in climates generally unsuitable for other crops, and so it is widely valued for its nutritional and financial yield from otherwise inclement areas. It is well suited to smallholder farming with a relatively short harvest cycle of 90 –140 days allowing other crops to be grown in the field. It is often intercropped with other grains.
Sesame is now cultivated around the dry tropics between the latitudes of 40° N and S. It is scarcely cultivated in the USA or Europe, not only because of climate but also because of the low returns per unit area. Non-shattering varieties have been bred in order to mechanize the crop, but the great majority of the world’s output is still harvested by hand.
B. Sesame Products
Sesame is grown for its seeds, and the primary use of the sesame seed is as a source of oil for cooking. The young leaves may also be eaten in stews, and the dried stems may be burnt as fuel with the ash used for local soap making, but such uses are entirely subordinate to seed production (see Table 1).
Sesame is commercialized in a number of forms. Most sesame is processed directly into oil by the grower or within the producing region, but can also be sold in various stages of processing, for various uses, such as meal, paste, confections, and bakery products. Once harvested, the seed is cleaned and dried to about 8% moisture and may then be stored before crushing. The seed is typically crushed intact for the oil. This, however, yields a meal that is made bitter and somewhat indigestible by the presence of the fibrous husk. As such the meal is only useful as cattle feed.
The quality of the meal can be improved by removing the seed coat, dehulling, before crushing. In India, where sesame meal is an important food, this process is a standard feature of an oil extraction plant. The meal is notable for its high protein concentration which is rich in methionine and tryptophan. Since these amino acids are missing from a number of other sources of vegetable protein, such as soya, sesame meal or flour can be added to recipes to give a better nutritional balance to health food products.
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Dehulling is also important for the production of the ground seed pastes such as tahini and for confectionery uses. The dehulled seeds are extensively used in the ground form where they comprise the base material of tahini, a paste used as an ingredient in Eastern Mediterranean and Middle Eastern foods.
The seeds, hulled or dehulled, roasted or raw are now widely used in the European and North American bakery industry as a garnish on bread products. For bakery products it is more a question of consumer preference: the McDonald’s burger buns, for example, use only the whitest grades of de-hulled seed which have been treated to maintain their whiteness on baking, whereas other bread products exploit the darker color of the whole seeds to give aesthetic appeal.
Dehulling has always been a major problem for the sesame industry and a variety of solutions have been sought. The most basic approach is largely manual: the skins are rubbed off the wetted seed by hand. Mechanical techniques now use a similar combination of wetting and rubbing. Alkali treatments are also used to strip the hull, and this tends to result in a whiter seed. The most sophisticated plants now incorporate color sorters to differentiate between the different grades of seed.
Table 1: Sesame Products
Input
Products
Description and Uses
Seeds
Confectionery
Fried seeds may be bound together with sugar syrup to give sweetmeats.
Seeds
Biscuits
The whole seeds can be baked into biscuits.
(Hulled) seeds
Bakery
Popular in northern Europe either incorporated into breads or as decorative toppings. May be used hulled or whole.
Seeds, sometimes roasted
Oil
Particularly used in oriental cuisine. The flavor is quite strong and rarely compatible with traditional Western style cooking but also used as a salad oil.
Oil
Medicinal treatment
Ulcers and burns
Oil
Margarine
Once an important use, now other cheaper vegetable oils are available
Oil
Aerosol
Reported use as a synergist for pyrethrum sprays
Low grade oil
Various
Soaps paints, lubricants, and illuminants. Local uses, of no importance in international trade
Hulled seeds
Tahini
A paste of sesame seeds which is used as an ingredient in eastern Mediterranean and Middle Eastern foods
Tahini
Dips &spreads
Various ingredients, such as chickpeas or eggplants, are added to tahini to make dips and spreads such as hummus
Tahini
Halva
A sweet made from tahini and sugar with other added flavorings
Cake
Animal feed
Protein rich useful supplement
Cake from hulled seeds
Ingredient
Used in some Indian cooking. Also as a snack in, for example, the Nigerian Kulikuli.
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The dehulling process, no matter what the method, always involves wetting the seed, which leads to considerable drying costs. As a result, the price of de-hulled seed is at least 30% above the natural type. Dehulling is said to reduce the storage ability of the seed, particularly in hot climates.
Only a small proportion of the global sesame harvest enters international trade. For the most part, the oil is expressed locally and used locally for cooking or the seeds themselves are eaten, particularly after being fried. The oil has a distinctive nutty sweet flavor that has become established in the Far Eastern cuisine. It is also used in Europe and North America for cooking or as a salad oil, but the Eastern hemisphere oil market is much greater.
The oil is also useful in the industrial preparation of perfumery, cosmetics (skin conditioning agents and moisturizers, hair preparations, bath oils, hand products and make-up), pharmaceuticals (vehicle for drug delivery), insecticides and paints and varnishes. However, all of these uses are comparatively insignificant in terms of the quantities used.
C. Markets
C.1. Sesame Seed
C.1.a. Production
Global production of sesame seed is estimated by FAO at 3.15 mn tonnes per year (2001) having risen from 1.4 mn tonnes in the early 1960’s.
Figure 1 World Production of Sesame Seed
0 1,000,000 2,000,000 3,000,000 4,000,000 1961 1966 1971 1976 1981 1986 1991 1996 2001 Tonnes Source: FAOSTAT
The largest producers are China and India, each with an annual harvest around 750,000 tonnes followed by Myanmar (425,000 tonnes) and Sudan (300,000 tonnes). These figures are only rough estimates of the situation as sesame is a smallholder crop and much of the harvest is consumed locally, without record of the internal trade and domestic processing.
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Figure 2 Top Ten Producers of Sesame Seed (2001) 0 200,000 400,000 600,000 800,000 China Ind ia M yanmar Sud an Ug and a Nig eria Pakist an B ang lad esh M exico Tanzania Tonnes Source: FAOStat
C.1.b. Trade
Global exports of sesame seed are estimated to have reached 657,000 tonnes in 2000, having risen from 427,000 tonnes in 1988. The 2000 exports were valued at $478mn. Figure 3 shows the rise of Africa over the last ten years as a supplier of sesame seed and also the growth of Indian output.
Figure 3 Exports of Sesame Seed
Africa India C America China
1988 1990 1992 1994 1996 1998 2000
Tonnes 250,000
200,000
150,000
100,000
50,000
0
Source: FAOSTAT India is now the single largest exporter of sesame seed, with exports of some 180,000 tonnes, with Sudan in second exporting over 138,000 tonnes per year. In 1988 China was the principal exporter in the world. (Note that FAO data for China includes Taiwan).
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Figure 4 Top Ten Sesame Seed Exporters 0 50,000 100,000 150,000 200,000 India Sudan China Ethiopia Nigeria Venezuela Guatemala Mexico Tanzania Thailand Tonnes 1988 2000
Source FAOSTAT
Figure 5 shows the major importers of sesame seed. As before, FAO data for China includes Taiwan. The rise in international trade in sesame seed noted above is also shown in the increased imports in Figure 5. All the major importers show strong increase in consumption over the past 10 years.
Figure 5: Major Importers of Sesame Seed 0 25,000 50,000 75,000 100,000 125,000 150,000 175,000 Japan Egypt EU Korea USA China Syria Turkey Arabian Peninsula Israel Tonnes 1988 2000
Source: FAOSTAT Japan dominates the purchasing side of the trade for sesame seed, with an annual requirement up to 165,000 tonnes. Sesame oil, particularly from roasted seed, is an important component of Japanese cooking and traditionally this is the principal use of the seed. However, much of the recent increase
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seems to have come from expanding demand for sesame in other forms, either whole or processed. The trade estimates that 30% of imports are used in forms other than oil, either as a powder, a paste, a roasted condiment or whole. The increased consumer concern for healthy eating, and the beneficial image of sesame in this sector, is held to be responsible for this development in the market.
Figure 6 shows the progress of recent imports into Japan. Note that in 2001 Nigeria was the largest supplier to the Japanese market, the world’s largest import market for sesame.
Figure 6 Imports of Sesame Seed into Japan 0 25,000 50,000 75,000 100,000 125,000 150,000 175,000 1996 1997 1998 1999 2000 2001 tonnes Sudan Myanmar China Nigeria Total
Source: Japan Customs
Imports of sesame into Egypt have also grown strongly. Egypt was the second largest importer in 2000. Detailed statistics for Egypt’s foreign trade have not been located for this report so there is no information on the origin of the sesame imports. However, it is likely that Sudan and Uganda are the major suppliers, given their proximity and the presumed lower cost of transport.
Imports of sesame seed into the EU have grown over the 1990s and the market now imports in excess of 80,000 tonnes. The major consuming markets in the EU are Greece, Germany, the Netherlands and the UK. In Greece, sesame is used mostly for preparing tahini, the paste of ground sesame seeds, which is used as an ingredient. In northern Europe, sesame is more commonly used as a bakery product and is particularly popular in Germany and the Netherlands either within breads or on the surface of bread and breadsticks as a garnish.
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Figure 7 Imports of Sesame Seeds to the EU 0 25,000 50,000 75,000 100,000 1996 1997 1998 1999 2000 2001 tonnes Nigeria Guatemala Sudan India Total
Source: EUROSTAT
A rapid rise in sesame imports has been seen in South Korea, where the inability of local production to keep pace with demand, and the liberalization of imports, has allowed trade to increase dramatically. Korea is principally an oil market. Local production amounts to some 28,000 tonnes and despite the 40% import duty the market is still heavily dependent on foreign suppliers.
Figure 8 Imports of Sesame Seed to South Korea 0 20,000 40,000 60,000 80,000 1996 1997 1998 1999 2000 2001 tonnes Pakistan India China Sudan Total
Source: Korean Customs Service
The Korean sesame market, like the Japanese market, mainly imports sesame for oil extraction. Unlike the Japanese market, however, sesame imports are controlled by a government organization that largely buys through a tendering process. In the past, the bulk of sesame was imported from China. Increasingly, other sources such as India, Sudan and, most recently, Pakistan, are taking the market share.
The USA is the fifth largest import market with a steady demand for 45,000 to 50,000 tonnes per year. All uses of sesame are found within the USA and there is a significant local production to augment the imported supplies to the market. Imports are mostly derived from Central America
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where the higher value bold sesame seeds are available for garnishing bakery products such as hamburger buns.
Figure 9 Imports of Sesame Seeds to the USA
0 20,000 40,000 60,000 1996 1997 1998 1999 2000 2001 tonnes Venezuela Mexico Guatemala India Total
Source: US Dept. of Commerce, Bureau of the Census
Finally the import demand for sesame in Taiwan remains strong. Again this is mainly an oil market. There has been little change in demand over the recent years, and importers remain dependent on three origins – India, Thailand and Myanmar.
Figure 10 Imports of Sesame Seed to Taiwan 0 10,000 20,000 30,000 40,000 1996 1997 1998 1999 2000 2001 tonnes Myanmar Thailand India Total
Source: Taiwan Directorate General of Customs
C.1.c. Pricing
The sesame market is not centralized or regulated internationally and there are no objective mechanisms for price reporting. The Public Ledger and the Market News Service of the International Trade Center both publish prices based on interviews but these are not always consistent. Indicative prices are shown in Table 2 below based on a variety of sources:
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Table 2: Sesame Seed Prices
Origin
Price US $ /tonnes
Basis
High
Low
Guatemala
1400
Fob
1670
880
Venezuela
1280
Fob
Uganda
550
Fot
500
650
India hulled
940
CIF
India natural
700
CIF
Sudan natural
600
Fob
China
1100
C&f
Source: Public Ledger, MNS & Trade Discussions
Prices in 2002 are significantly lower as a result of continued pressure of supplies.
C.2. Sesame Seed Oil
C.2.a. Processing
Sesame oil is extracted from the seeds by mechanical pressing. The seed may be cold-pressed to give an aromatic salad oil or hot pressed to give a lower grade product. In the Far East, sesame seeds may also be toasted (i.e. roasted) before pressing to yield much darker oil that is more pungent.
The hot pressed oils are usually refined before consumption to remove free fatty acids, residues and all aromatic compounds. This then leaves bland colorless oil. Refined oils are suited to the cooking of the Western hemisphere where highly aromatic oils are not appreciated.
C.2.b. Trade
The Food and Agriculture Organization estimate that global production of sesame oil now exceeds 200,000 tonnes per year. However, global exports are just over 30,000 tonnes per year. Clearly processing is either local, with the oil used within the region, or the seeds are exported and pressed nearer to the market.
The major exporters of oils are China and Japan. Among African sesame growers, only Sudan has developed a significant export trade in oil with shipment in 2000 estimated by the FAO at 2,800 tonnes.
The importers of oil are the countries of the Far East and also Europe. These markets have rather different requirements for the types of oil, with a strong preference for refined oils in Europe.
C.2.c. Pricing
Relative to other vegetable oils, the trade in sesame oil is quite minor in quantity but high in value. Table 3 compares some volumes and values in global exports of vegetable oils.
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Table 3 Global Exports of Selected Vegetable Oils
Quantity (tonnes)
Value ‘000 US $
Implied unit value /tonne
1961
1970
1980
1990
1998
1998
Oil of Cotton Seed
229,859
240,202
431,135
309,055
260,467
168,564
$647
Oil of Groundnuts
290,094
429,753
476,593
347,615
310,827
295,111
$949
Oil of Jojoba
622
1,797
18,514
$10,303
Oil of Olive
202,622
243,403
265,264
564,828
926,137
2,177,754
$2,351
Oil of Palm
629,181
906,260
3,616,636
8,071,864
10,401,595
6,370,579
$612
Oil of Palm Kernels
81,792
164,799
379,155
917,878
987,113
658,663
$667
Oil of Sesame Seed
1,311
2,048
7,857
23,780
23,480
57,498
$2,449
Oil of Soya Beans
390,592
1,120,510
3,196,066
3,738,885
8,023,140
5,132,832
$640
Oil of Sunflower Seed
218,284
731,937
1,113,136
2,648,585
3,527,017
2,473,767
$701
Source: FAOSTAT
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Figure 11: Map of Nigeria Showing Sesame Producing Regions BORNO YOBE JIGAWA KANO KATSINA ZAMFARA SOKOTO KEBBI NIGER KADUNA BAUCHI PLATEAU NASSARAWA TARABA BENUE ADAMAWA GOMBE KOGI KWARA OYO OGUN LAGOS FCT EDO ONDO EKITI DELTA IMO RIVER BAYELSA CROSS-RIVER OSUN ABIA EBONYI ENUGU AKWA IBOM ANAMBRA Sesame Producing Region Source: Chemonics International Inc.
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II. CURRENT STATUS OF THE NIGERIAN SESAME INDUSTRY
A. Introduction
Sesame is an important crop to Nigerian agriculture: it is quite extensively cultivated, it yields in relatively poor climatic conditions, and it is widely used within Nigeria and is an important component of Nigeria’s agricultural exports. It is however, given little attention and there are relatively few companies involved in the trade. As a smallholder crop, often intercropped with others, the extent of cultivation is poorly known and there is little information on yields or productivity. For the most part the surplus crop is commercialized, bulked up and exported with minimal processing limited to drying and cleaning.
B. Production
Sesame production in Nigeria probably began in the middle belt region of the country and later spread out between latitudes 6o and 10o N. Sesame is commonly grown by smallholder farmers. The major producing areas in order of priority are Nasarawa, Jigawa and Benue States. Other important areas of production are found in Yobe, Kano, Katsina, Kogi, Gombe and Plateau States. Harvesting begins in late December and continues through July. Each producing area has only one season.
There are 2 types of sesame produced in Nigeria
1. White/raw = Food-grade used in bakery industry. 98-100% whitest grade seeds.
2. Brown/mixed = Primarily oil-grade.
The White (Food Grade) seed is grown around the towns of Keffi, Lafia/Makurdi, Doma, and in Nassarawa, Taraba, and Benue States. It is easier to sort and the Fumani/Denin people consume sesame locally. The Brown/mixed grows in the North, in Kano State and in Jigawa State near Hadejia, and somewhat in the southern part of Katsina State. There is some local consumption of the brown grade, but not much. The brown can be upgraded to Food Grade through bleaching, as discussed earlier.
Several varieties of sesame are cultivated in Nigeria. The basic agronomic characteristics of the varieties are shown in Table 4.
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Table 4 Characteristics of Sesame Grown in Nigeria
Variety
Days to Maturity
Seed Color
Seed Size mm
Oil Content
Potential Yield kg/ha
NCRI BEN-01M
102-115
White
3
45%
1000
NCRI BEN-02M
102-115
Light
3
45%
750
NCRI BEN-032
125-140
Brown
2
40%
600
E-8
90
White
3.6
50%
1000
Yandev-55
125
Light
2.5
45%
600
Source: National Cereals Research Institute, Badeggi
As noted above, annual output of a smallholder crop such as sesame is difficult to estimate when much of the production is consumed locally without entering into formal trade. Large-scale commercial production of sesame is limited in Nigeria, and there are no accurate records of national production. Figure 12 below charts the growth in sesame production as estimated by the Central Bank of Nigeria. Figures from FAO are more conservative with an estimated output of 60,000 tonnes in 1999.
Figure 12 Sesame Production in Nigeria 0 30,000 60,000 90,000 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 tonnes
Source: CBN Annual Report
C. Processing
As presented earlier, sesame can be processed to several different stages, such as simply cleaning, or cleaning and dehulling, cleaning/dehulling/drying, cleaning/dehulling/drying/crushing for oil, etc. In Nigeria, the primary processing facilities focus almost exclusively on cleaning. There are a few commercial cleaning facilities, and they are all privately held. Two are in Kano with a cleaning capacity of about 100 tonnes a day, and one is in Lagos with a cleaning capacity also of about 100
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tonnes a day. A commercial cleaning facility is about to be installed in Nassarawa State, with a capacity to handle about 200 tonnes a day.
There are also dehulling/cleaning/color-sorting facilities in Lagos, but most of the sorting is done manually by women, some located at storage facilities in Lafia and Makurdi. There are no commercial crushing plants for sesame seed oil. There are a few groundnut oil mills in Lagos that have the capacity to crush sesame seed as well as peanuts, and there is also an idle sesame seed crushing plant in Lagos. The Raw Material and Research Development Council in Abuja has a pilot plant that is supposed to crush about 20 tonnes per day. It should be operational soon.
D. Marketing
As a predominantly smallholder production, the crop is commercialized by buyers or middlemen who tour the rural areas buying from the farmers. The sesame is transported to the larger towns, bulked in store and sold to the agents of the major exporters. The major buying centers are the urban markets in the states where sesame is predominantly cultivated. These centers include:
Town State
Doma Nasarawa Malam-Madori Jigawa Potiskum Yobe Oturkpo Benue Dawanau Kano Anecdotally, prices increase through the season. Table 5 below shows the annual average price of sesame seed (source unknown; pricing point unknown).
Table 5: Annual Average Price of Sesame
Year
Price Naira/tonne
1996
22,500
1997
28,500
1998
38,500
1999
38,800
2000
41,500
E. Local Consumption
Industrial processing and utilization of sesame have not been fully developed in Nigeria. However, the product is locally processed and utilized in various forms in the states where the crop is cultivated. Principal among the products are: “KANTUN RIDI” and “KUNUN RIDI”. At the local level oil is also extracted from the seed and the cake is made into “KULIKULI” which together with the leaves are used to prepare local soup known as “MIYAR TAUSHE”. The oil is used locally for cooking as well as for medicinal purposes such as the treatment of ulcers and burns. The stem and the oil extract are equally used in making local soap. In all the states where sesame is cultivated,
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women are more involved in the local processing of sesame seed into commercial products. A more convenient dehulling technique has been developed through addition of 3% Sodium Chloride (salt) and soaking over night. Roasting of seed at 100°C also gives optimum oil yield. The National Cereals Research Institute, Badeggi have developed a 10kg hydraulic hand press for household and small-scale sesame oil extraction.
F. Export
About 60-70% of sesame produced in Nigeria is exported to the major consuming countries. Without commercial scale oil extraction, only the seed is exported from Nigeria. There are contract-cleaning facilities available in Lagos (for example AKKAY) but no hulling operations.
Three companies dominate the buying and export of sesame: ⇒􀀠Olam Nigeria ⇒􀀠Akkay Limited ⇒􀀠Dangote ⇒􀀠Dantata
Market share of these and other exporters is not known.
Detailed export statistics for Nigeria are not available but Table 6 below has been compiled from shipment records and, for comparison, from the import statistics of the major destinations.
Table 6: Nigeria Sesame Export Figures (Units: tonnes)
Year
Shipments Reported by Export Inspectorate
Total Imports from Nigeria Reported by EU, USA, Japan
1996
12,770
11,976
1997
46,388
22,537
1998
37,767
23,319
1999
20,640
23,730
2000
24,949
26,822
2001
37,381
Sources:Export Inspectorate Division, Federal Ministry of Commerce
The discrepancies between the two series are not explained. The higher shipment in 1997 might imply that a destination other than the EU, Japan or USA was involved in buying Nigerian sesame.
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III. ENVIRONMENT
A. Government Policy/Infrastructure
When Nigeria achieved independence in 1960, agricultural exports accounted for over 60% of total
export earnings and a similar proportion of the gross domestic product (GDP). In the 1970s and
1980s, a combination of increasing petroleum production and rising prices brought easy and
windfall earnings, which diverted Nigeria’s attention from developing other sectors of the economy
and encouraged the neglect of agricultural exports. Over the years, there have been different
agricultural policies targeted at improving the performance of the agricultural sector. The objectives
of agricultural policy can be broadly stated as follows:
-Provision of self-sufficiency in food and raw materials for industries;
-Improvement of the socio-economic welfare of rural people engaged in agriculture; and
-Diversification of the sources of foreign exchange earnings through increased agricultural
exports arising from adoption of appropriate technologies in food production and distribution
While the policies are sound, until the recent return to democratic governance, the will and strategies to implement them had largely been absent during years of military rule. The emergence of democracy required the institutionalization of civil governance structures and the revival of the productive value-adding sector of the economy, which is so strategic in addressing the multifaceted socio-economic problems confronting the nation.
Nigeria does currently have access to several export stimulation incentives:
A.1. Federal Ministry of Finance, Budget Office
In the area of exports, exporters enjoy a couple of government initiatives. The Federal Ministry of Finance, working with several parastatals, including the Nigerian Export Promotion Council (NEPC), Nigeria Export-Import Bank (NEXIM) and local commercial banks, has several export-oriented incentives:
a. Manufacture – In- Bond Scheme
The Manufacture-in-Bond Scheme is designed to encourage manufacturers to import duty free raw
material inputs and other intermediate products whether prohibited or not for the production of
exportable goods, backed by a bond issued by any recognized commercial bank, merchant bank,
insurance company or NEXIM. The Bond will be discharged after evidence of exportation and
repatriation of foreign exchange has been produced.
b. Duty Drawback Scheme
The Duty Drawback Scheme provides for refund of duties/surcharges on raw materials including
packing and packaging material used in the manufacture of products upon effective exportation of
the final product.
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c. Export Expansion Grant Scheme
The Export Expansion Grant Scheme provides for cash inducement for exporters who have
exported a minimum of N500,000 (five hundred thousand Naira) worth of processed products.
Exporters of processed products initially received a 4% rebate on repatriated proceeds, which, as of
2002, has been increased to 20%.
This scheme was discussed most often by the exporters interviewed for this report. Due to the 6-8 month delay in payment, there is a secondary market for the Duty Credit Certificates. The Certificates are essentially cash, to be collected eventually from the Government. Usually the exporter sells this certificate to importers through the banks at 10%.
d. Export Development Fund Scheme
The Export Development Fund (EDF) is a scheme developed by the Federal Government of Nigeria
to provide financial assistance to private sector exporting companies to cover part of their initial
expenses in respect of the following export promotion activities:
• Participation in training courses, symposia, and seminars in all aspects of export promotion
• Advertising and publicity campaigns abroad
• Export market research
• Product design and consultancy
• Participation in trade fairs, missions
• Cost of collecting trade information and
• Supporting the development of export oriented industries
Also the Nigerian Export Promotion Council meets regularly with exporters to discuss, develop and improve new incentives.
A.2. The Nigerian Export-Import Bank (NEXIM)
NEXIM was established by the Federal Government of Nigeria by Decree 38 of 1991 to replace the defunct Nigerian Export Credit Guarantee and Insurance Corporation with the main objective of providing a commercially oriented and export-stimulating institution that is committed to bringing about export-led recovery as well as a culture of self-inspired and sustained exporting in Nigeria. The bank was established to provide, among others: credit in local currency to support Nigerian exports; export credit guarantee and export credit insurance; domestic credit insurance when such a facility will help export; credit insurance in respect of external trade, transit trade and entrepot trade; and investment guarantees and investment insurance facilities. NEXIM maintains a foreign exchange revolving fund for lending to exporters who need to import foreign inputs; raw materials and packaging materials to help export production and a trade information system to support export business. NEXIM also buys and sells foreign exchange.
Presently, NEXIM is mainly involved in the production of financial and risk bearing services, market information export education and advisory services, to mention a few. NEXIM has emerged as the predominant source of short-term trade financing provided to the export sector. The major financial facilities offered by NEXIM in support of non-oil export include:
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a. Rediscounting and Refinancing Facility (RRF):
This helps banks to provide pre and post shipment finance in local currency to support non-oil
exports. While the refinancing scheme provides a bank with credit of up to one year, the
rediscounting scheme provides short-term pre-shipment credit up to 120 days and post-shipment
credit up to 60 days. As at the time of this report, exporters were receiving a NEXIM rediscounting
rate of 21% (inclusive of bank charges, about 4%) as compared to commercial bank rate of 35%
b. Foreign Input Facility (FIF):
This provides manufacturers of export products foreign currency loans to import capital equipment,
packaging and raw materials to produce finished products for export. The facility was intended to
benefit small and medium sized enterprises whose assets do not exceed $6 million.
c. Stocking Facility:
This is provided in local currency and it enables manufacturers of exportable goods to procure
adequate stocks of raw materials to keep their production at optimal levels.
NEXIM Risk Bearing Services include:
• Export Credit Guarantee Facility
• Export Credit Insurance Facility
• Investment Guarantee and Investment Insurance Facilities
• Interstate Road Transit Scheme to guarantee goods transiting Nigeria to other member states of the Economic Community of West African States (ECOWAS)
In 2000, NEXIM was able to generate $15.90 million of foreign exchange from its Export Credit Rediscounting and Refinancing Facility (RRF), which represents an increase of 99.5% over levels achieved in the previous year. The foreign exchange generated from RRF operations serves as a barometer of effectiveness of NEXIM’s export support activities. Besides these export incentives, the Federal Government still has a long way to go with bureaucratic procedures, particularly at the port and data/information management, which is unreliable and in most cases, non existent.
Under the first National Development Plan, the Federal Government restricted itself to research activities for improving production of cash crops. However, following the emergence of many problems, especially food shortages, the government decided to play a more dynamic role in primary production, beginning from the mid-1970s. Consequently, the policy instruments adopted were: provision of credit; intensification of agricultural research; input subsidy; price support; manpower development and training; mechanization; land reform and international trade regulation. In order to ensure the realization of policy goals, various institutions were established for supervising or for providing some of the essential supporting services required by the sector.
A.3. The Africa Project Development Facility (APDF)
The APDF was launched in 1986 to support the development of competitive African small and medium enterprises, with services that are needed and affordable, working mainly through local institutions and consultants. The APDF has assisted over 460 enterprises in Sub Saharan Africa.
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APDF helps to improve operations through capacity building and training. While APDF itself does not provide finance, it helps to source financing from the market and to find appropriate business solutions.
B. Socio-Economic Issues
Due to the nature of the ADAN project, there is a special need to highlight several socio-economic concerns as well as the business issues. Both criteria are important to the success of any project.
B.1. Environmental Effects
Sesame is an environment-friendly crop. It is suited to smallholder cultivation and, in adding to the diversity of local products, supports sustainable agricultural systems.
B.2 Impact on Incomes
Sesame is tolerant of dry conditions and can yield in areas where agriculture is difficult. It is suitable for intercropping and, with a short harvest cycle, the land is free for other use during 8-9 months of the year. Generally, sesame grows in areas of sorghum production and the crop can provide an alternative source of income as well as cooking oil for local consumption.
B.3 Impact on Women
Women are employed in the production, marketing and processing of sesame.
B.4. Geographic Distribution
Sesame grows in many states of Nigeria across the central (middle belt) and northern parts of the country.
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IV. OPPORTUNITIES AND CONSTRAINTS
A. Opportunities
A.1. Growing Market
Demand for sesame has grown strongly in all the major consuming countries over the past decade. There are good reasons for continued growth in the demand as the product matches the healthy eating drivers in a number of the developed markets. Further, oriental cuisine has an enduring popularity in western markets and is likely to continue.
A.2. Multiple markets and uses
Sesame is imported by over 100 countries according to the FAO. There are at least 20 countries that import 7,000 tonnes or more per year. There is therefore the opportunity to achieve a broad market base. There is a diversity of uses for sesame and this feature should be exploited by developing the appropriate product to suit the end user.
A.3. Nigeria is an important producer and source
Nigeria already has the technology to produce a significant export crop. There is an established demand for sesame from Nigeria and this must be built upon. Despite the poor reputation of Nigerian exports, sesame is accepted in the market and Nigeria is a known source of supply.
A.4. Nigeria is the largest supplier of sesame to Japan
In 2001 Nigeria became the largest supplier of sesame to the World’s largest importer of sesame, namely Japan. It is critical to maintain and grow this market share.
A.5. Unexploited markets
Nigerian sesame is valued primarily as an oilseed. Despite its important position in the Japanese market, Nigerian sesame is not gaining market share in other important sesame oil markets such as Korea and Taiwan. Further, while sesame for oil use is generally valued below sesame destined for other uses, there are opportunities to meet the specifications required for such alternatives. Nigerian sesame does not feature in the Mediterranean imports, for example, for a variety of reasons that could be investigated.
B. Constraints to Overcome B.1. Commodity pricing
Nigerian sesame is bought based only on the price set by the seller. With its high oil content it is suited to pressing, and the low price and lack of attention to quality issues make the Nigerian product an attractive raw material for the industrial processor. Here the quality requirements are low and price expectations are also low. It is however a sector where it is difficult to compete other than on price.
B. 2. Many other suppliers
Sesame grows widely across the tropics and is a popular crop with smallholders who can achieve an income in inhospitable conditions with the crop. The yields under mechanization are quite low and
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the labor based producing regions can compete with the developed economies. The crop is widely cultivated, and as an opportunity to boost rural incomes the crop receives widespread donor support as well. Thus, although demand is likely to continue to grow we can also anticipate the continued expansion of supply and a consequent competitive market.
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V. CONCLUSIONS AND RECOMMENDATIONS
Sesame is an important export crop in Nigeria, and Nigeria has a substantial role in the global sesame trade. Annual exports of sesame from Nigeria are valued at about US$20mn and Nigeria is the primary supplier of sesame seed to the world’s largest importer, Japan. These features are poorly recognized and it is timely to develop support and action to facilitate the continued expansion of this sector.
The position of sesame is not well understood either in Nigeria or in the global trade and a significantly clearer interpretation of Nigeria’s competitive position and opportunities is essential. Other sectors examined during the course of this project, such as cashew or shrimps and prawns, have developed action plans and strategies for achieving defined objectives. Any business strategy must marry the internal capabilities of an enterprise, such as sesame in Nigeria, with the environment in which it operates, which here is the global marketplace. The compilation of this report has revealed areas of uncertainty in both, and the formulation of strategy and associated activities is therefore premature. In the first instance, a greater understanding of the position of Nigeria and its options is needed and the following notes elaborate recommendations towards this goal.
Recommendations
As a smallholder crop, capable of providing income in areas where the options are quite limited, sesame has a key role in sustaining agriculture in disadvantaged areas. Participants at a workshop for the sesame sector, held in October 2002, complained of inadequate support for producers
Recommendation 1: Appraise and evaluate the research, trials and extension services available to the sesame sector.
The annual exports of sesame seed are valued at $20mn in a global trade in sesame seed valued at $480mn. Despite being the leading supplier to Japan, Nigerian sesame exporters have only 4% of the world market. Exports are heavily skewed towards Japan.
Recommendation 2: Investigate opportunities in other markets, with particular focus initially on the oil markets of the Far East, Korea and Taiwan.
Korea presently buys through a tendering system with specifications that include minimum oil content of 48%. With a more flexible specifications the price advantage of Nigerian sesame as a source of oil would become clear.
Recommendation 3: Explore the possibility of changes in the Korean tendering process.
Japan has a number of different uses for sesame seed from oil production, both natural and toasted, as well as bakery and confectionery uses. It is likely that Nigerian sesame is used for oil production while other origins supply sesame for other uses. Nigeria must consolidate its current position in this market with a review of its competitive position and the opportunity to develop into other uses.
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Although access may have been gained on the basis of lowest price it is important to move away from this strategy.
Recommendation 4: Evaluate the competitive position of Nigerian sesame in the Japanese market and assess the opportunity for increasing market breadth.
It seems that Nigerian sesame is generally imported as an oilseed. The seed from Nigeria has relatively high oil content and is competitively priced. Where the bakery and confectionery users of sesame have particular requirements concerning seed attributes, such as color and flavor, the sesame oil sector is less demanding. Nigeria’s position is therefore precarious: low prices can be replicated by any other low cost producer and quality norms, such as there any, are easily matched.
Recommendation 5: In conjunction with recommendation #4, evaluate the opportunity for differentiating Nigerian sesame for oil users and explore the economics and market potential for pressing sesame in Nigeria on an industrial scale.
While Nigerian sesame is used for oil production, the possibility of accessing other markets for sesame should be investigated.
Recommendation 6: Appraise the requirements of other sesame sectors.
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Appendix 1: SWOT Analysis of the Nigeria Sesame Industry
The purpose of this SWOT – Strength, Weakness, Opportunities and Threats analysis - is to provide basic information for strategic restructuring of the investment appraisal within the industry in Nigeria. The analysis highlights several issues regarding the sub-sector that are critical for both Nigerian and international stakeholders. The observations under each component have been grouped into the general categories: market/price; production; processing; exporting; and labor.
Strengths
Market/price
• Acceptance by the Japanese
• Strong domestic demand for sesame underpinning the production
• Product with recognized nutritional benefits
Production
• Widespread cultivation
• Cultivation technology well understood
• Contributes to sustainability of local agriculture
• Minimal inputs required
• High employment oriented
• Relatively pest and disease free in Nigeria
Export-related
• The existence of highly professional exporters
• Established trading connections with overseas markets
• Easy access to sea-freight
Labor
• Large supply of unskilled labor
Weaknesses
Market/Price
• Highly dependent on a single market, Japan
• Poor market breadth
• High cost of local capital
• Value added not provided (exporting a raw commodity rather than a food ingredient)
Production
• Produced by a large number of smallholders
• Absence of standards
• Absence of support to farmers – trials, extension etc
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Processing
• Limited at present to cleaning facilities
Export-related
• The delays and low efficiencies of the ports and shipping operators in Lagos
• Poor infrastructure
• Low standards
Opportunities
Market/Price
• Increasing demand for sesame
• Multiple markets and uses
• Unexploited markets such as Taiwan and Korea
• Further opportunities in Japan
Production
• Potential for expanding production
• Improve farm income by improving quality criteria
• New varieties
Processing
• Possibility of hulling, grinding or pressing for oil
Export-related
• Increase foreign exchange earnings
Threats
Market/Price
• Fall in international prices
• No differentiation from other supplies to this sector
• Discounted price for Nigerian sesame
• Low credibility of Nigerian products and exporters
• The ability of other low cost producers to mirror the comparative advantages of Nigerian sesame in the global market
Production
• Competition from other crops
Export-related
• Bureaucratic policies and procedures with export.
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APPENDIX 2: CONTRIBUTIONS
Company
Contact
Title
Location
Private Sector – Nigeria
1.
Olam Nigeria Ltd.
V. Srivathsan
Chief Executive
Lagos, Nigeria
2.
Goldchains International Ltd
Boma Anga
Managing Director
Lagos, Nigeria
3.
Shebag Holdings Ltd
Sheriff T Balogun
Managing director
Kaduna. Nigeria
Private Sector – UK
7.
Choithrams Company
Andrew Barker
London, UK
8.
Accord Associates
Peter Jaeger
9.
Accord Associates
Grahame Dixie
Nigerian Government
1.
Projects Coordinating Unit (PCU)
Dr. Salisu Ingawa
Head of Unit
Abuja
2.
Projects Coordinating Unit (PCU)
Ismaila Adamu
Personal Assistant to the Head of Unit
Sheda-Abuja
3.
Projects Coordinating Unit (PCU)
Gidado Bello
Sheda-Abuja
4.
Nigerian Export Promotion Council (NEPC)
Mathew Iranloye
Chief Trade Promotion Officer
Abuja, Nigeria
5.
Nigerian Export Import Bank (NEXIM)
R. O. Madaki
Chief Executive
Abuja
6.
Nigerian Export Import Bank (NEXIM)
Baba Yusuf Ahmed
Executive Director
Abuja, Nigeria
7.
Nigerian Export Import Bank (NEXIM)
Muhammad Muhtar
Deputy General Manager
Abuja
8.
Nigerian Export Import Bank (NEXIM)
Arua K. Ndukwe
Research Dept
Abuja
9.
Federal Office of Statistics (FOS)
Henry Eteama
Statistician
Abuja
10.
Central Bank of Nigeria (CBN)
Ngozi Egbuna
Agric Studies Unit
Abuja
11.
Central Bank of Nigeria (CBN)
Moses. F. Otu
Principal Economist
Abuja
12.
Cocoa Research Institute of Nigeria (CRIN)
Rev. Oduwole
Ibadan, Oyo
NGO
1.
Enterprise for Development International (EfDI)
Dr. Charles Akinola
Executive Director
Ikeja, Lagos
Multilateral/Donor Agencies
1.
USAID
Abdulkadri Gudugi
Agricultural Economist
Abuja
2.
African Project Development Facility, APDF
Akin Adeoye
Project Officer
Lagos, Nigeria
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APPENDIX 3: PROJECT BACKGROUND
Before independence, Nigeria’s economy was largely sustained through agricultural exports. Major
industries such as Unilever PLC, Paterson Zochonis PLC, etc., depended on agricultural raw
materials from Nigeria and other Commonwealth nations in the tropics and export trade in
agricultural commodities accounted for over 60% of Nigeria’s export earnings. Apart from this, the
sector also accounted for a similar proportion of the nation’s Gross Domestic Product (GDP) and it
was the largest source of employment. In the 1970s and 1980s, a combination of increasing
petroleum oil production and rising prices brought easy and windfall earnings, which diverted
Nigeria’s attention and encouraged the neglect of agricultural exports. The country invariably lost
its competitive advantage in certain commodities, which it had painstakingly established.
While one cannot blame agricultural neglect alone for the nation’s dwindling export trade in
agricultural commodities, other factors such as increase in industrial activities in the country,
government policies on local value added commodity processing, finance, pricing, etc., have all
contributed to the weakening of the nation’s capacity to participate effectively in the commodity
export trade. Over the years, there have been different agricultural policies targeted at improving the
performance of the agricultural sector and reviving export trade in semi-processed agricultural
commodities. These policies focused mainly on:
-Attaining self-sufficiency in food and raw materials for industries;
-Improvement of the socio-economic welfare of rural people engaged in agriculture; and
-Diversification of the sources of foreign exchange earnings through increased agricultural
exports arising from adoption of appropriate technologies in food production and distribution
While the policies are sound, until the recent return to democratic governance, the will and strategies to implement them had largely been absent during years of military rule. The emergence of democracy required the institutionalization of civil governance structures and the revival of the productive value-adding sector of the economy, which is so strategic in addressing the multifaceted socio-economic problems confronting the nation.
Nigeria plays a strategic role in the stability of sub-Saharan Africa and the challenges associated with rebuilding the economy of such a huge nation whose economy had been mismanaged and ravaged as a result of poor governance are enormous.
The United States Government through its Agency for International Development (USAID) is assisting the Nigerian Government and its people rebuild the socio-economic and political structures of the nation. Accordingly, a USAID strategic plan, which focused on five strategic goals, was developed. These strategic goals are to:
a. Sustain Nigeria’s transition to democratic governance;
b. Strengthen Nigeria’s institutional capacity for economic reform and enhance its capacity to revive agricultural growth;
c. Develop the foundation for education reform;
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d. Increase the use of family planning, maternal and child health services and HIV/AIDs/STD preventive measures; and
e. Improve management of local infrastructure and the energy sectors.
To help revive agricultural growth, the Government of Nigeria (GON) requested USAID/Nigeria’s assistance to determine which agricultural products have the greatest potential to increase foreign exchange and create jobs. The GON is convinced that a realistic business plan to maximize Nigerian’s agricultural potential must be based on sound information, an analysis of what actually exists, and a clear understanding of the constraints in the sector that inhibit the GON and the Nigerian private sector from capitalizing on these opportunities.
Chemonics International is working with USAID/Nigeria and Government of the Federal Republic of Nigeria (GON) to meet these objectives. The following three-phase approach was designed to achieve these objectives:
I. Assessment of the Global Market for Agricultural Products;
II. Evaluation of Nigeria’s Agricultural Sector; and
III. Agricultural Industry Action Plans
The final result will be the submission of a number of Industry Action Plans (IAPs) that will be implemented as part of a comprehensive agricultural competitiveness program that would be supported by USAID and other international donors as well as the international and Nigerian private sectors.
I. Assessment of the Global Market for Agricultural Products.
The first phase was a broad overview of the world market for agricultural products, including products that are currently, or potentially could be, produced in Nigeria. The global markets, including the Africa region, were evaluated using a rigorous methodology and evaluation criteria developed by consultants experienced in global markets for tropical agricultural products. For example, the set of criteria included existing consumer demand, trends in market shares, capital requirements, product distribution, commodity prices and volatility, financial returns, etc. The results of this assessment produced a prioritized list of the most promising global marketing opportunities for current and prospective Nigerian agricultural export products.
II. Evaluation of Nigeria’s Agricultural Sector: “The Agriculture Commodity Summit.”
In collaboration with the Project Coordinating Unit (PCU) of the Federal Ministry of Agriculture, and the Nigeria Export Promotion Council (NEPC), Chemonics International held a stakeholders’ summit on Nigerian agricultural exports in Abuja in January 2002. The summit was attended by more than two hundred participants and stakeholders who helped to identify and recommend, for further study in the Agricultural Industry Action Plans, those commodities that had the greatest
Chemonics International Inc. 33 USAID PCE-I-00-99-00003-00
November 2002 Task Order No. 812
potential for creating increased economic growth, external and internal trade, opportunities for employment and increased income and wealth for Nigeria.
Facilitated by local and expatriate consultants, the summit pulled together local experts; stakeholders and public officials who jointly developed a comprehensive list of opportunities matching existing and potential Nigerian agricultural products with current and forecasted world demands. The summit combined completion of questionnaires (during the summit meeting) with the discussion of the rank-ordered list of commodities for domestic production and export potentials.
The summit also created a high profile public and private sector buy-in for this approach to agricultural competitiveness and demand for the “downstream” activities’ industry action plans, and possible constituencies/partnerships for the eventual implementation of the action plans.
From the summit, the following commodities were chosen for in-depth study:
1. Ginger
2. Gum Arabic
3. Sesame
4. Cashew
5. Leather/Skins
6. Marine Products (prawn farming)
Following the summit, a team of consultants including expatriate and local industry experts conducted “validation visits.” These visits were to selected sites, and stakeholders (exporters, processors, producers, etc.) and were designed to confirm information and gather data necessary for preparing useful action plans.
III. Industry Action Plans
Industry Action Plans are being developed for the most promising commodities selected from the agricultural commodity summit. These action plans, or “road-maps”, will identify weak links in the commodity chain that limit competitiveness and suggest practical steps for overcoming them. This analysis includes private and public sector individuals most active in the selected commodity. The plan will focus on actions individuals interested in establishing and/or expanding their presence in the export of Nigerian agricultural products to take. The action plan will also identify interventions appropriate for USAID and GON support to both increase and accelerate private sector agribusiness activity within the commodity chain.
Chemonics International Inc. 34 USAID PCE-I-00-99-00003-00
November 2002 Task Order No. 812

Saturday, January 12, 2008

studies on sesame industry

CONTENT

INDUSTRY OVERVIEW

ECONOMICS

ORGANISATIONAL BEHAVIOUR

FINANACE

MANAGEMENT INFORMATION SYSTEM

MARKETING

REFERENCES

INDUSTRY

OVERVIEW

THE INTERNATIONAL SESAME INDUSTRY:

Introduction:

Sesame seeds (or sesamum or benniseed) are the seeds of the tropical annual Sesamum indicum. The species has a long history of cultivation, mostly for its yield of oil. The original area of domestication of sesame is obscure but it seems likely to have first been brought into cultivation in Asia or India.

The plant is usually 60 to 120cm tall and the fruit is a dehiscent capsule held close to the stem. When ripe, the capsule shatters to release a number of small seeds. The seeds are protected by a fibrous ‘hull’ or skin, which may be whitish to brown or black depending on the variety. 1000 seeds weigh some 4-8g. The seeds have a high oil content of 44-60%.

The plant is deep rooting and well adapted to withstand dry conditions. It will grow on relatively poor soils in climates generally unsuitable for other crops, and so it is widely valued for its nutritional and financial yield from otherwise inclement areas. It is well suited to smallholder farming with a relatively short harvest cycle of 90 –140 days allowing other crops to be grown in the field. It is often intercropped with other grains.

Sesame is now cultivated around the dry tropics between the latitudes of 40° N and S. It is scarcely cultivated in the USA or Europe, not only because of climate but also because of the low returns per unit area. Non-shattering varieties have been bred in order to mechanize the crop, but the great majority of the world’s output is still harvested by hand.

Sesame is commercialized in a number of forms. Most sesame is processed directly into oil by the grower or within the producing region, but can also be sold in various stages of processing, for various uses, such as meal, paste, confections, and bakery products. Once harvested, the seed is cleaned and dried to about 8% moisture and may then be stored before crushing.

EDIBLE OIL INDUSTRY IN INDIA:

Climatic conditions in India favor growing a variety of oilseeds. On the demand side, a growing population and vastly varied dietary habits have ensured a thriving market for edible oil in the country. In fact, there is a substantial demand overhang, which is expected to continue for some years. At present, this is offset by imports that cater to almost half of the total domestic consumption. With cheap imports threatening to cripple the domestic industry, the government is walking a tightrope between filling the demand
supply gap and the political need to keep the domestic industry in good health.
Unorganized, medium and small players dominate the industry. Hence, quality remains a concern. There is need for better regulatory control to protect consumers.

An average Indian's yearly edible oil requirement has gone up from 7.0 kg in 1996-97 to 11.8 kg in 2000-01. Despite the variety of oilseeds grown in India, the country imports a substantial quantity of edible oil, which also works out cheaper. Allied factors contributing to imports are the higher cost of cultivation in India and uneconomic oil extraction systems.

Oilseeds in India account for around 5.0 percent of the Gross National Product (GNP) and 14.0 percent of the country's area under cultivation of crops. Castor, Groundnut, Linseed, Niger, Rapeseed, Mustard, Safflower, Sesame and Sunflower are some of the major oilseeds grown. India produces 10 percent of the world's oilseeds, but has a low productivity of around 850-900 kg per hectare (compared to a world average of around 1,100-1,350 kg per hectare).

The amount of oil extracted from the seed varies with the type and quality of seed. In many cases, the oil recovery rate is upwards of 30.0 percent with Sesame accounting for a high 45.0 percent.

Domestic consumption of edible oils has been growing at 4.0-5.0 percent a year. The consumption in 2001-02 was around 25.75 million tons. Non-packaged oils account for nearly 50.0 percent of consumption in both urban and rural markets. In the remaining 50.0 percent contributed by packaged oils, branded oils constitute a small portion of approximately 10.0-15.0 percent.

Importance of Edible Oils in the Country’s Economy:

Oilseeds and edible oils are two of the most sensitive essential commodities. India is one of the largest producers of oilseeds in the world and this sector occupies an important position in the agricultural economy and accounting for the estimated production of 24.35 million tonnes of nine cultivated oilseeds during the year 2004-05. India contributes about 7-8% of the world oilseeds production. Export of oilmeals, oilseeds and minor oils has increased from 3.36 million Tones in the financial year 2004-05 to 4.98 (Prov.) million tons in the financial year 2005-06. In terms of value, realization has gone up from Rs. 4613 crores to Rs.5299 crores. India accounted for about 6.4% of world oilmeal export.

Types of Oils commonly in use in India:

India is fortunate in having a wide range of oilseeds crops grown in its different agro climatic zones. Groundnut, mustard/rapeseed, sesame, safflower, linseed, nigerseed/castor are the major traditionally cultivated oilseeds. Soyabean and sunflower have also assumed importance in recent years. Coconut is most important amongst the plantation crops. Efforts are being made to grow oil palm in Andhra Pradesh, Karnataka, Tamil Nadu in addition to Kerala and Andaman & Nicobar Islands. Among the non-conventional oils, ricebran oil and cottonseed oil are the most important. In addition, oilseeds of tree and forest origin, which grow mostly in tribal inhabited areas, are also a significant source of oils. Figures pertaining to estimated production of major cultivated oilseeds, availability of edible oils from all domestic sources and consumption of edible oils (from Domestic and Import Sources) during the last few years are as under: -

( In lakh Tonne)

Oil Year (Nov.- Oct.)	Production of Oilseeds	Net availability of edible oils from all domestic sources	Consumption of Edible Oils (from domestic and import sources)
1998-1999	247.48	69.60	95.82
1999-2000	207.15	60.15	102.11
2000-2001	184.40	54.99	96.76
2001-2002	206.63	61.46	104.68
2002-2003	148.39	46.64	90.29
2003-2004	251.86	71.40	124.30
2004-2005 (Est.)	243.54	72.47	117.89
2005-2006 Prov.	266.97	79.11	120.86

Source : (i) Production of oilseeds : Ministry of Agriculture

(ii) Net availability of edible oils: Directorate of Vanaspati, Vegetable Oils & Fat

Consumption Pattern of Edible Oils in India:

India is a vast country and inhabitants of several of its regions have developed specific preference for certain oils largely depending upon the oils available in the region. For example, people in the South and West prefer groundnut oil while those in the East and North use mustard/rapeseed oil. Likewise several pockets in the South have a preference for coconut and sesame oil. Inhabitants of northern plain are basically hard fat consumers and therefore, prefer Vanaspati, a term used to denote a partially hydrogenated edible oil mixture. Vanaspati has an important role in our edible oil economy. Its production is about 1.2 million tonnes annually. It has around 10% share of the edible oil market. It has the ability to absorb a heterogeneous variety of oils, which do not generally find direct marketing opportunities because of consumers’ preference for traditional oils such as groundnut oil, mustard oil, sesame oil etc. For example, newer oils like soyabean, sunflower, ricebran and cottonseed and oils from oilseeds of tree and forest origin had found their way to the edible pool largely through vanaspati route. Of late, things have changed. Through technological means such as refining, bleaching and de-odouraisation, all oils have been rendered practically colourless, odourless and tasteless and, therefore, have become easily interchangeable in the kitchen. Newer oils which were not known before they have entered the kitchen, like those of cottonseed, sunflower, palm oil or its liquid fraction (palmolein), soyabean and ricebran. These tend to have a strong and distinctive test preferred by most traditional customers. The share of raw oil, refined oil and vanaspati in the total edible oil market is estimated at 35%, 55% and 10% respectively.

Major Features of Edible Oil Economy:

There are two major features, which have very significantly contributed to the development of this sector. One was the setting up of the Technology Mission on Oilseeds in 1986. This gave a thrust to Government's efforts for augmenting the production of oilseeds. This is evident by the very impressive increase in the production of oilseeds from about 11.3 million tonnes in 1986-87 to 24.8 million tonnes in 1998-99. There was some setback in 1999-2000 because of the un-seasonal rain followed by inclement weather. The production of oilseeds declined to 20.7 million tonnes in 1999-2000. However, the oilseeds production in 2005-06 is estimated to be 26.70 million tonnes. The other dominant feature which has had significant impact on the present status of edible oilseeds/oil industry has been the programme of liberalisation under which the Government's economic policy allows greater freedom to the open market and encourages healthy competition and self regulation rather than protection and control. Controls and regulations have been relaxed resulting in a highly competitive market dominated by both domestic and multinational players.

ECONOMICS

The oil industry provide multifarious opportunities to potential investors in this Sector, both domestic and foreign. As several policy initiatives are undertaken by the Government of India since liberalization in August 1991, the industry sectors have witnessed unprecedented growth in most of the segments.

The consumer products industry is the complex, global collective of diverse businesses that together supply much of the food, oil, gas energy consumed by the world population.

The edible oil industry is one of the largest industries in India. It is ranked fifth in terms of production, consumption, export and expected growth. This Industry is widely recognized as a 'sunrise industry' in India having huge potential for uplifting agricultural economy, creation of large scale processed oil manufacturing and oil chain facilities, and the resultant generation of employment and export earnings.

Edible oil Industry is of enormous significance for India's development because of the vital linkages and synergies that it promotes between the two pillars of the economy, namely Industry and Agriculture. It covers a spectrum of products from sub-sector comprising agriculture, horticulture, Plantation, animal husbandry and fisheries.

The entries of multinationals, aggressive rise of commodity branding and low cost of technology are changing the economics of the Indian edible oil industry. The rise of aggressive regional players making forays into categories where entry barriers are low and a boom in Indian Fast Moving Consumer Goods (FMCG) markets and the rising need for these products are the key reasons for this growth in oil business.

In Store…The Indian oli market is approximately Rs 2, 50,000 crore ($69.4 billion), of which value-added oil products comprise Rs 80,000 crore ($22.2 billion). Despite oil production in the country is expected to double by the year 2020. With oil production expected to double by 2020, large investments are already going into oil and oil processing technologies, skills and equipment.

The Government has formulated and implemented several Plans and Schemes to provide financial assistance for setting up and modernizing of oil processing units, creation of infrastructure, support for research and development and human resource development in addition to other promotional measures to encourage the growth of the processed oil sector.

A Goldman Sachs report ('Dreaming with BRICs: The Path to 2050') states that among Brazil, Russia, India and China, India will grow the fastest over the next 30 to 50 years by leveraging its demographic advantages and through continued development. At its present rates of growth, the burgeoning market in the country "would be adding nearly one France every 3.5 years and one Australia every year".

Different laws govern the oil processing sector in India. The prevailing laws and standards adopted by the Government to verify the quality of edible oil is one of the best in the world.

Multiple laws/regulations prescribe varied standards regarding oil additives, contaminants, oil colours, preservatives and labelling. In order to rationalize the multiplicity of food laws, a Group of Ministers (hereinafter referred as “GoM”) was recently set up to suggest legislative and other changes to formulate a modern, integrated food law, which will be a single reference point in relation to the regulation of oil products. The food laws in India are enforced by the Director General of Health Services, Ministry of Health and Family Welfare, Government of India (GOI).

There are various food laws applicable to food and related products in India :-

• Prevention of Food Adulteration Act (PFA), 1954 and Rules (Ministry of Health & Family Welfare).
• The Standards of Weights and Measures Act, 1976, and Standards of Weights and Measures (Packaged Commodities) Rules, 1977
• Agriculture Produce (Grading & Marking) Act (Ministry of Rural Development).
• Essential Commodities Act, 1955(Ministry of Food & Consumer Affairs).
• Fruit Products Order (FPO), 1995.
• Meat Food Products Order, 1973 (MFPO).
• Milk and Milk Products Order, 1992.
• The Infant Milk Substitutes, Feeding Bottles and Infant Foods (Regulation of Production, Supply and Distribution) Act, 1992 and Rules 1993.
• The Insecticide Act, 1968.
• Export (Quality Control and Inspection) Act, 1963.
• Environment Protection Act, 1986.
• Pollution Control (Ministry of Environment and Forests).
• Industrial Licenses.
• BIS Act, 1986.
• VOP (Control) Order – 1947.
• SEO (Control) Order -1967.

The Prevention of Food Adulteration Act (PFA), 1954 focuses primarily on the establishment of regulatory standards for primary edible oil products, which constitute the bulk of the Indian diet. The Central Committee for Food Standards, chaired by the Director General of Health Services, is the decision making entity. The appeals process, however, is cumbersome and time consuming. All imported products must adhere to the rules as specified in the regulation, including the labeling and marking requirements.

The Standards of Weights and Measures Act, 1976 and Standards of Weights and Measures (Packaged Commodities) Rules, 1977 are legislative measures are designed to establish fair trade practices with respect to packaged commodities. The rules prescribe that the basic rights of consumers regarding vital information about the nature of the commodity, the name and address of the manufacturer, the net quantity, date of manufacture, and sale price are provided on the label. There are additional mandatory labeling requirements for food items covered under the PFA. The Department of Consumer Affairs in the Ministry of Consumer Affairs, Food, and Public Distribution is the regulatory authority and enforcement agency.

The fruit and vegetable processing sector is regulated by the Fruit Products Order, 1955 (FPO), which is administered by the Department of Food Processing Industries. The FPO contains specifications and quality control requirements on the production and marketing of processed fruits and vegetables, sweetened aerated water, vinegar, and synthetic syrups. All such processing units are required to obtain a licence under the FPO and periodic inspections are carried out. Processed fruit and vegetable products imported into the country must meet the FPO standards.

Meat Food Products Order, 1992 administers the permissible quantity of heavy metals, preservatives, and insecticide residues for meat products. This order is equally applicable to the domestic processors and importers of meat products. However, its implementation is weak due to unorganized production in the domestic market and fewer imports.

Milk and Milk Products Order, 1992 order regulates the production, distribution, and supply of milk products; establishes sanitary requirements for dairies, machinery, premises; and sets quality control standards for milk and milk products. Standards specified in the order are also equally applicable to imported milk products.

The Destructive Insects and Pests Act, 1914, and Plants, Fruits, and Seeds (Regulation of Import in India) Order, 1989 regulate imports of planting seeds into India, and prohibit imports of seeds for sowing and planting materials without a valid permit. The implementing agency is the Directorate of Plant Protection, Quarantine, and Storage under the Department of Agriculture and Cooperation, Ministry of Agriculture.

After the enactment of the proposed Food Safety and Standards Bill, 2005 in India, the food processing sector would be governed by only one law and one regulator, instead of presently applicable 15 different laws. With the simplified mechanism growth in the food-processing sector would kick-start, which is needed to ensure higher growth for the agriculture sector.

Policies and Regulations :

Since liberalization several policy measures have been taken with regard to regulation & control, fiscal policy, export & import laws, taxation, exchange & interest rate control, export promotion and incentives to high priority industries. Food processing and agro industries have been accorded high priority with a number of important reliefs and incentives.

At present,no industrial license is required for almost all of the food & agro processing industries except for some items like: beer, potable alcohol & wines, cane sugar, hydrogenated animal fats & oils etc. and items reserved for exclusive manufacture in the small scale sector. Items reserved for Small Scale Industry (hereinafter referred as “SSI”) include pickles & chutneys, bread, confectionery (excluding chocolate, toffees and chewing-gum etc.), rapeseed, mustard, & groundnut (except solvent extracted), ground and processed spices, sweetened cashew nut products, tapioca sago and tapioca flour.

In order to boost the food processing sector, the Centre has permitted under the Income Tax Act a deduction of 100 per cent of profit for five years and 25 per cent of profit in the next five years in case of new agro processing industries set up to package and preserve fruits and vegetables. Excise Duty of 16 per cent on dairy machinery has been fully waived off and excise duty on meat, poultry and fish products has been reduced from 16 per cent to 8 per cent.

Fiscal Policy & Taxation :

Wide ranging fiscal policy changes have been introduced progressively. Excise & Import duty rates have been reduced substantially. Many processed food items are totally exempt from excise duty. Custom duty rates have been substantially reduced on plant & equipments, as well as on raw materials and intermediates, especially for export Production. Corporate taxes have been reduced and there is a shift towards market related interest rates.

There are tax incentives for new manufacturing units for certain years, except for industries like: beer, wine, aerated water using flavouring concentrates, confectionery & chocolates etc. Indian currency (rupee) is now fully convertible on current account and convertibility on capital account with unified exchange rate mechanism is foreseen in coming years. Repatriation of profits is freely permitted in many industries except for some, where there is an additional requirement of balancing the dividend payments through export earnings

Custom clearance: Food items

Customs Department in India follows certain guidelines for custom clearance of food items which includes checks on the condition of the hold in which the products were transported, ensuring whether they meet the requirement of storage as per the nature of the products, and does not in any way cause deterioration or contamination of the products. Customs Department is also required to check the physical/visual appearance of goods in terms of possible damage and its compliance with labelling requirements under the Prevention of Food Adulteration Rules and the Packaged Commodities Rules. In addition,any imported food item, at the time of its import, should have a valid shelf life of not less than 60 % of original shelf life. The Customs Department ensures that the articles which do not meet this condition are not allowed clearance for home consumption.

Apart from the checks on all the consignments of edible/food products imported through Ports, Inland container Depots, Air Cargo Complexes, Container Freight Stations and Land Customs Station the samples of imported food products are required to be referred to the Port Health Officer for testing. For alleviating the difficulties of importers, it has been decided that pending receipt of the test repot, such consignments be allowed to be stored in warehouses under Section 49 of the Customs Act, 1962.

New Opportunities: In India

The Government has recently established Special Economic Zones with the purpose of promoting exports and attracting FDI. These SEZs do not impose duty on imports of inputs and they enjoy simplified fiscal and foreign exchange procedures and allow 100% FDI.

The Government is also moving towards introducing an integrated food law, which is expected to help meet the requirements of international trade and make the Indian food and oil industry competitive in the global market. To harness the value-creating potential of agro processing, superior market mechanism and infrastructure are required to be created. State governments have already begun to actively encourage the creation of aggregators by encouraging companies to engage in agriculture marketing. It is believed that this may provide the basis to jumpstart private investment into cold chain and other supply chain infrastructure.

ORGANISATIONAL

BEHAVIOUR

Motivation:

The combination of a person's desire and engergy directed at achieving a goal. It is the cause of action. Influencing people's motivation means getting then to want to do what you know must be done.

Often the employee knows how to perform the desired behavior correctly, the process is good, and all resources are available, but for one reason or another, chooses not to do so. It now becomes a motivational issue.

Motivation is the combination of a person's desire and energy directed at achieving a goal. It is the cause of action. Motivation can be intrinsic - satisfaction, feelings of achievement; or extrinsic - rewards, punishment, or goal obtainment. Not all people are motivated by the same thing and over time their motivations might changes.

People can be motivated by such forces as beliefs, values, interests, fear, and worthy causes. Some of these forces are internal, such as needs, interests, and beliefs. Others are external, such as danger, the environment, or pressure from a loved one. There is no simple formula for motivation -- you must keep a open viewpoint on human nature. There is a complex array of forces steering the direction of each person and these forces cannot always be seen or studied. In addition, if the same forces are steering two different people, each one may act differently. Knowing that each person may react to different needs will guide your decisions and actions in certain situations.

Incentives motivate learning:

Incentives include privileges and receiving praise from the instructor. The instructor determines an incentive that is likely to motivate an individual at a particular time. In a general learning situation, self-motivation without rewards will not succeed. Students must find satisfaction in learning based on the understanding that the goals are useful to them or, less commonly, based on the pure enjoyment of exploring new things.

Some individuals , some adults have little capacity for internal motivation and must be guided and reinforced constantly. The use of incentives is based on the principle that learning occurs more effectively when the person experiences feelings of satisfaction. Caution should be exercised in using external rewards when they are not absolutely necessary. Their use may be followed by a decline in internal motivation.

It is recognized that no grand theory of motivation exists. However, motivation is so necessary for learning that strategies should be planned to organize a continuous and interactive motivational dynamic for maximum effectiveness. The general principles of motivation are interrelated. A single teaching action can use many of them simultaneously.

People seek others with whom to compare their abilities, opinions, and emotions. Affiliation can also result in direct anxiety reduction by the social acceptance and the mere presence of others. However, these motivators can also lead to conformity, competition, and other behaviors that may seem as negative

Performance Appraisals:

A lot of people consider giving performance appraisals as being quite uncomfortable. However, it is not the judging of people that is really uncomfortable, rather it is the judging of bad performance that is uncomfortable. Thus, eliminate poor performance in the first place, and performance appraisals become a lot more pleasant to give. Now of course you are not going to eliminate poor performances completely, however, with a little bit of planning they can be greatly reduced.

Performance has often been described as "purposeful work" -- that is, a job exists to achieve specific and defined results. And what bad performers really do is perform "work activities" (busy work), rather than activities that contributes to effective performance.

The first step in performance planning is to determine the results that you want the performer to achieve. After all, workers generally want to know what they need to do, how well you need them to do it, and how well they are actually doing it (feedback).

In addition, a worker should not walk blindly into a performance appraisal. Past counseling sessions, feedback, and one-on-ones should give her a pretty clear understanding of what to expect from the appraisal. If you blind-side her, you have not done your job as a leader. Helping your team grow is not a once or twice yearly task, but a full-time duty.

The appraisal should be a joint effort. No one knows the job better than the person performing it. By turning the appraisal into a real discussion, rather than a lecture, the leader may learn some insightful information that could help boost his or her performance in the future. Before the meeting, have the worker complete her own self-appraisal. Although you might think they will take advantage of this by giving themselves unearned high marks, studies have shown that most workers rate themselves more critically than the leader would have.

FINANCE

Finance studies and addresses the ways in which individuals, businesses, and organizations raise, allocate, and use monetary resources over time, taking into account the risks entailed in their projects. The term "finance" may thus incorporate any of the following:

The study of money and other assets;
The management and control of those assets;
Profiling and managing project risks;
The science of managing money;
As a verb, "to finance" is to provide funds for business or for an individual's large purchases (car, home, etc.).

Finance is one of the most important aspects of business management. Without proper financial planning a new enterprise is unlikely to be successful. Managing money (a liquid asset) is essential to ensure a secure future, both for the individual and an organization.

Finance is used by individuals (personal finance), by governments (public finance), by businesses (corporate finance), as well as by a wide variety of organizations including schools and non-profit organizations. In general, the goals of each of the above activities are achieved through the use of appropriate financial instruments, with consideration to their institutional setting.

Financial management is duplicate with the financial function of the Accounting profession. However, financial accounting is more concerned with the reporting of historical financial information, while the financial decision is directed toward the future of the firm.

The activity of finance is the application of a set of techniques that individuals and organizations (entities) use to manage their money, particularly the differences between income and expenditure and the risks of their investments.

MANAGEMENT INFORMATION SYSTEM

Management Information Systems sometimes referred to as Information Management and Systems, are the discipline covering the application of people, technologies, and procedures — collectively called information systems — to solving business problems. Management Information Systems are distinct from regular information systems in that they are used to analyze other information systems applied in operational activities in the organization. Academically, the term is commonly used to refer to the group of information management methods tied to the automation or support of human decision making, e.g. Decision Support Systems, Expert systems, and Executive information systems.

The terms MIS and information system are often confused. Information systems include systems that are not intended for decision making. MIS is sometimes referred to, in a restrictive sense, as information technology management. That area of study should not be confused with computer science. IT service management is a practitioner-focused discipline. MIS has also some differences with Enterprise Resource Planning (ERP) as ERP incorporates elements that are not necessarily focused on decision support.

In their infancy, business computers were used for the practical business of computing the payroll and keeping track of accounts payable and receivable. As applications were developed that provided managers with information about sales, inventories, and other data that would help in managing the enterprise, the term "MIS" arose to describe these kinds of applications. Today, the term is used broadly in a number of contexts and includes (but is not limited to): decision support systems, resource and people management applications, project management, and database retrieval applications.

The organization has sufficient computers for their business. They planed to install Enterprise Resource Planning software so that the organization may try to decrease the man power and improve their efficiency to complete the work with a shorter period. Also the company wages to workers will be decreased.

MARKETING

MANAGEMENT

Marketing is a societal process that is needed to discern consumers' wants; focusing on a product/service to those wants, and to mould the consumers towards the products/services. Marketing is fundamental to any businesses growth. The marketing teams (Marketers) have the task to create the consumer awareness of the products/services through marketing techniques; if a business does not pay attention to their products/services and their consumers' demographics, the business would not be able to endure longevity.

Marketing tends to be seen as a creative industry, which includes advertising, distribution and selling. It is also concerned with anticipating the customers' future needs and wants, often through market research.

A market-focused, or customer-focused, organization first determines what its potential customers desire, and then builds the product or service. Marketing theory and practice is justified in the belief that customers use a product or service because they have a need, or because it provides a perceived benefit.

Two major factors of marketing are the recruitment of new customers (acquisition) and the retention and expansion of relationships with existing customers (base management). Once a marketer has converted the prospective buyer, base management marketing takes over. The process for base management shifts the marketer to building a relationship, nurturing the links, enhancing the benefits that sold the buyer in the first place, and improving the product/service continuously to protect the business from competitive encroachments.

Marketing methods are informed by many of the social sciences, particularly psychology, sociology, and economics. Anthropology is also a small, but growing, influence. Market research underpins these activities. Through advertising, it is also related to many of the creative arts. Marketing is a wide and heavily interconnected subject with extensive publications. It is also an area of activity infamous for re-inventing itself and its vocabulary according to the times and the culture.

Within most organizations, the activities encompassed by the marketing function are led by a Vice President or Director of Marketing. A growing number of organizations, especially large US companies, have a Chief Marketing Officer position, reporting to the Chief Executive Officer.

Marketing communications breaks down the strategies involved with marketing messages into categories based on the goals of each message. There are distinct stages in converting strangers to customers that govern the communication medium that should be used.

Many companies today have a customer focus (or customer orientation). This implies that the company focuses its activities and products on consumer demands. Generally there are three ways of doing this: the customer-driven approach, the sense of identifying market changes and the product innovation approach.

In the consumer-driven approach, consumer wants are the drivers of all strategic marketing decisions. No strategy is pursued until it passes the test of consumer research. Every aspect of a market offering, including the nature of the product itself, is driven by the needs of potential consumers. The starting point is always the consumer. The rationale for this approach is that there is no point spending R&D funds developing products that people will not buy. History attests to many products that were commercial failures in spite of being technological breakthroughs.

In a product innovation approach, the company pursues product innovation, then tries to develop a market for the product. Product innovation drives the process and marketing research is conducted primarily to ensure that a profitable market segment(s) exists for the innovation. The rationale is that customers may not know what options will be available to them in the future so we should not expect them to tell us what they will buy in the future. However, marketers can aggressively over-pursue product innovation and try to overcapitalize on a niche.

Core marketing elements such as segmentation, targeting and positioning are still relevant in the modern (or post-modern) world. However, they are complex topics that need a high level of effort, intelligent thinking as well as resources to be implemented successfully. A definitive statement cannot be made whether the conventional marketing concept is applicable in today’s environment. Its relevance is very much situational and depends on many factors such as the product, the segment, time, location, political and economic conditions and the inner workings of a company.

Marketing has helped create value through customized products, no-questions-asked refund policies, comfortable cars, environmental attention, shopkeepers’ smile, and guaranteed delivery dates. Even some government departments address the public not as ‘the Queen’s subjects’ or ‘the applicants’ any more but as ‘customers.' Of course all of the above is done for economic or political gain, for better or worse. Despite all this achievement, to dismiss marketing as a failure is unfair.

Marketing also helps companies avoid unnecessary R&D, operational and sales costs by helping to develop products because customers want them, not for the sake of innovation. Another success is the now commonly implemented value-pricing principle, whereby a product or service is sold for the price the customer is willing to pay, not on a cost-plus basis. This way, both suppliers and customers get a fair deal.

Due to increased competition, privatization and globalization, marketing and business development have become increasingly important functions in all construction organizations. Marketing research, corporate branding and public relations are increasingly being seen as vital in a marketplace typified by sophisticated and demanding clients and customers, and a socially and environmentally aware general public and media.