the economics of sesame seeds

It’s sesamo harvest time around here, and that’s very, very good news this year. Sesame seeds (like the ones on your hamburger bun) are planted in the spring (September), grown in very large stalks that have little pods full of seeds, then they’re cut and made into little teepees to dry in the sun around February, harvested in late March and sifted to get out the dirt, then packed into 50 kilo bags and sold to huge seed distributors in the city. Last year a kilo of sesamo sold for less than 2.000g.

This year a kilo of sesamo is selling for over 8.000g. That means that a single bag in that picture is worth 400.000g, a third of my monthly salary, and I lost count of how many bags are in that huge truck. In a single hectacre of land, which is what the young people just starting out might have, a sesamo harvest this year is worth 8.000.000g, which is close to a YEAR’s salary for a middle-class teacher. Imagine those huge estancias that have dozens or even hundreds of hectacres!

There are several reasons for the high price of sesamo this year. One is that because of the drought here last year, fewer farmers planted sesamo – we had just barely enough rain to be able to plant in September, and it was definitely a gamble as there’s never a guarantee for more rain. So with less supply from here in Paraguay, the price rose a bit.

But I was just told that also there’s been a drought in China, the world’s biggest sesamo producer, and problems in Bolivia too, and without their supply on the world market, the price of sesamo has soared this season.

Which is all great news for Paraguayan farmers, who suddenly have an entire year’s salary burning a hole in their pockets. My friends who own an appliance store say that they’ve never done business like this. Families who haven’t before been able to buy their kids coats are now buying motos, fridges, bikes, stereo systems, washing machines, anything they can get their hands on, in cash. They can’t bring the motos from Asuncion fast enough. There’s already a spate of brick-buying for home-construction and expansion.

Responsible investors are also buying cows, which were described to me as the surest investment anyone could make. You buy a female cow for 1.500.000g, within two years it has two calves (and meanwhile you use and/or sell its milk and cheese). Now you can sell 4.500.000g worth of cow at any time, because there’s always a market for cows and no depreciation.

There’s no bank in Tacuati, the bank in Horqueta often robs from savings accounts (including PCVs’!), our local Cooperative is in a complicated state of bankruptness, and the culture as a whole is very present-minded (ie. what savings??). I hope that this success doesn’t backlash into an epidemic of alcoholism or reckless spending that leads to future financial trouble. And I hope that folks enjoy their good luck, because it doesn’t seem to happen often around here.