Entering the European market for sesame seed oil

Many suppliers in developing countries already deliver sesame seed oil to the European cosmetics market. To stand out, you need to offer a high level of service and comply with European requirements. The better the service you provide and the closer you meet importers’ expectations, the more likely it is that they will buy from you.

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

What are the mandatory requirements?

First of all, you need to understand the legal requirements in the European Union (EU) for sesame seed oil used in cosmetics (and for any substance used as a cosmetic ingredient). You can find these in the European legislation on cosmetic products. Companies supplying cosmetics to Europe must ensure that all substances used in those products comply with the requirements.

In particular, you need to be familiar with three important regulations.

• The EU Cosmetics Regulation (EC 1223/2009). This is the primary regulation for cosmetic products for the EU market. Its main aim is to protect human health to a high level. You should focus in particular on Chapter 4 and Annexes I to VI.
• Registration, Evaluation, Authorisation and Restriction of Chemicals (REACH). This regulation protects both human health and the environment. It includes measures to promote alternative methods for assessing the hazards associated with chemical substances.
• The EU Classification, Labelling and Packaging Regulation (CLP) (EC 1272/2008). Again, this regulation aims to protect human health and the environment. But it also facilitates the free movement of substances, mixtures and products. It is the only legislation in force in the EU for the classification and labelling of substances and mixtures.

If you want to sell to customers in the United Kingdom (UK), it now has its own regulations for cosmetics sold there. And for the ingredients used in them. These include UK REACH and GB CLP. Although the UK has left the EU, nothing has changed in terms of the safety of cosmetic and personal care products. The UK Regulation is still aligned with the strict EU rules. Importantly, the ban on using animals to test ingredients and products remains firmly in place.

Think about your customer’s position, too. It has to sell on ‘your’ sesame seed oil to its own customers. They could be manufacturers, other distributors or the consumers of end products containing sesame seed oil. What does your customer need from you in order to make its own sales activities successful?

As well as the existing technical requirements, new regulations are going to be introduced soon. These cover sustainability, human rights, the climate and the environment. The European Green Deal will also impact global supply chains that reach the European Union. In addition, many European companies have their own requirements for their suppliers – particularly in niche segments. On the other hand, you can expect customers active in niche segments to pay more for the quality that they want.

As a company supplying ingredients for use in cosmetic products, you are operating in the chemicals sector. So the regulations for that sector also apply to you. Two very important regulations in this respect are REACH and the CLP.

REACH

REACH defines procedures for collecting and assessing information about the properties and hazards of chemical substances. Companies need to register their substances, and to do this they need to work together with other companies that are registering the same substance. REACH only applies to European companies. Non-EU companies are not subject to its requirements, even if they export their products to the European Union.

Whilst REACH covers all chemical substances imported or manufactured in the EU, certain categories are exempt from its registration procedures. These include vegetable oils such as sesame seed oil.

One key part of REACH is Annex II, which contains the requirements for Safety Data Sheets (SDSs). Sesame seed oil needs an SDS to be transported within Europe. Under international transport rules, non-EU companies also need an SDS to ship their chemical substances (including sesame seed oil) to the EU from the place of manufacture.

CLP

The CLP is based on the United Nations’ Globally Harmonized System of Classification and Labelling of Chemicals (GHS). Many countries have made this part of their own law. The CLP’s requirements will therefore be familiar to non-EU companies that need to classify, label, package and transport chemicals in their own countries. CLP data is included on the Safety Data Sheet.

One aspect of the European management of the CLP legislation that can help non-EU companies is that the CLP notifications made by EU manufacturers and importer-distributors are published by the European Chemicals Agency (ECHA).

Below is the CLP notification summary published by ECHA for sesame seed oil.

Figure 1: CLP summary for sesame seed oil

Source: ECHA CLP database
Note that none of the 108 importers who have notified ECHA that they are importing sesame seed oil have classified it as hazardous.

It is also important to note that companies have to produce their own data for their own notifications. They cannot use the data already published in another notification. For further information, you will find extensive resources on the ECHA website. And UNIDO has published a guide to understanding CLP.

Technical documentation

To comply with the EU’s legal requirements, European buyers of sesame seed oil for cosmetics need you to provide a well-prepared technical dossier. This not only demonstrates your commitment to quality and reliability, but also your concern for sustainable and ethical sourcing.

The technical dossier should include the following items:

• A Technical Data Sheet (TDS)
• A Safety Data Sheet (SDS)
• A Certificate of Analysis (CoA)
• A fatty-acid profile
• An allergen declaration
• Information on traceability back to origin
• Responsible sourcing policies and practices
• Records of certifications awarded and standards applied

The allergen declaration for vegetable oils is used by the cosmetics industry because of the possible risk of allergic reactions. It is not a legal requirement, but a precaution taken by the cosmetics industry based on experience from the food industry, even though it has been shown that vegetable oil does not cause allergic reactions in the vast majority of susceptible people. The cosmetics industry is extremely concerned about allergic reactions from the use of its products. See the box below for further information.

Allergens

Peanuts are a well-known food allergen. The European Food Safety Authority (EFSA) advises people who are allergic to peanuts to avoid crude peanut oil as well, because it may contain traces of peanut protein. But the EFSA also reports that refined peanut oil has not been found to trigger allergic reactions. It therefore concludes that the risk of a severe adverse reaction to highly refined peanut oil seems to be low, but cannot be ruled out entirely.

Source: Cosmetics Europe.

Which channel is most interesting for you?

As an exporter of sesame seed oil, the most interesting sales channel for you is specialist importer-distributors in Europe. This is because they are used to handling large quantities of natural ingredients, and also have experience dealing directly with exporters from developing countries. So they understand the challenges and constraints associated with the supply, processing, testing and delivery of raw materials.

Given that most vegetable oils need to be refined before they are used in cosmetics, you should also look for companies with their own refining facilities.

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

In your journey to enter the European market, you will be competing with other companies in your own country and elsewhere.

What countries are you competing with?

Sesame seed is grown in many parts of the world with a suitable climate and soil. In Africa alone, there are thirty producing nations. Of these, eleven export sesame seed oil and four (Burkina Faso, Kenya, Somalia and Sudan) are already supplying Europe. But 80% of European imports come from six non-African countries: Mexico, China, Singapore, India, Japan and Taiwan. For more details, see our study of the European market potential for sesame seed oil.

Table 1 lists those countries exporting more than €100,000 worth of sesame seed oil to the European Union and the UK (EU28) in 2017 and 2021. You will see from this that the European market is dominated by exports from Mexico.

Table 1: Countries exporting more than €100,000 worth of sesame seed oil (HS 151550) to the European Union (EU28) in 2017 and 2021

Exporters	Imported value in 2017 (x €1,000)	Imported value in 2021 (x €1,000)
Intra EU trade	17,506	28,972
Mexico	11,760	19,140
China	3,265	5,885
Singapore	3,959	5,859
India	1,447	3,644
Japan	1,086	2,847
United States of America	2,155	1,925
Taipei, Chinese (Taiwan)	1,015	1,855
Korea, Republic of	742	1,377
Burkina Faso	751	1,336
Malaysia	1,115	1,197
Hong Kong, China	618	1,128
Thailand	298	691
Uganda	135	353
Sri Lanka	64	212
United Arab Emirates	15	192
Sudan	44	160
Kenya	437	153
Somalia	22	138
Ukraine	17	109
Türkiye (Turkey)	279	94

Source: ITC Trade Map

Mexico

Mexico is the leading supplier of sesame seed oil to Europe, accounting for 40% of its imports. The country’s strength is that its quality, reliability and pricing meet the expectations of European buyers. Its average import price in 2021 was €3.50/kg. Mexico has held a dominant position as the primary exporter to Europe for the past five years. Based on past performance, this looks set to continue and poses a challenge for other countries trying to gain market share. At the same time, there are potential risks when 40% of a commodity comes from just one country. So that represents an opportunity for other countries, as buyers look to reduce their dependence on Mexico.

China

China is the second most important source of sesame seed oil for Europe. It is the world’s biggest producer of this oil and its third largest exporter, but exports to Europe are still only one third of those by Mexico. The average European import price for Chinese sesame seed oil was €5.25/kg in 2021. To a great extent, the volume of imports from the Far East is due to the popularity of Asian food in Europe. Four of the top-6 exporters to Europe are in that region. In the food industry, toasted sesame seed oil is more popular than untoasted oil. So this grade probably accounts for a large proportion of the trade with China and other Far Eastern nations. Toasted sesame seed oil is not used in cosmetics or in aromatherapy.

Singapore

The third-largest exporter of sesame seed oil to Europe is Singapore. It does not produce the seeds itself, but does process approximately 1,000 tonnes of sesame seed oil a year. The average import price is €5.26/kg. Singapore’s position on this list highlights its role as a trading hub, handling exports from other Asian countries.

India

India is Europe’s fourth-biggest source of sesame seed oil. The average import price in 2021 was €2.96/kg. That is the lowest for the six countries included in this study. One reason for that could be much of this oil is unrefined. For comparison, the price of sesame seed oil exported from the Netherlands to other European countries is €4.99/kg. And from France it is €5.95/kg. But it is likely this intra-EU trade is in so-called ‘RDBW’ (refined, bleached, deodorised and winterised) oil, possibly also already packaged for retail sale.

Japan

With approximately 54,000 tonnes of sesame seed oil produced in 2019, Japan is the world’s fifth-largest manufacturer of this product. Yet it ranks only seventieth in the list of sesame seed-producing countries. Of those 54,000 tonnes, Japan exported nearly 3,000 tonnes to Europe in 2021. That puts it in fifth position on the European list of suppliers. The average import price of €5.95/kg suggests that most Japanese oil has already been processed to a higher quality, and possibly prepackaged for the retail market as well.

Taiwan

Finally, Taiwan is Europe’s sixth most important source of sesame seed oil. The average import price in 2021 was €4.39/kg. Taiwan is also the fifth Asian country on the list of the top-6 exporters to Europe. This again highlights that region’s market dominance. As noted above, it is not possible from the import data to work out how much of the oil coming into Europe is used by the cosmetics industry. But that is likely to be considerably less than the food industry uses. Also, from these statistics we cannot distinguish between toasted and untoasted oil.

For you as an exporter from a CBI target country, this data highlight the challenge of trying to build a strong position in the European market. Especially when the dominant supplying countries account for 80% of Europe’s total imports. But below we highlight ways in which you may be able to compete with other suppliers.

What companies are you competing with?            

As your main customers are the European importer-distributors of sesame seed oil, your competition is other producers of sesame seed oil outside Europe. All the suppliers who are successful on the European market meet their buyers’ expectations in terms of price, quality and reliability.

Different buyers have slightly different definitions and expectations when it comes to price, quality and reliability. For example, a company that uses organic sesame seed oil in its products will be prepared to pay organic grade prices. Some buyers will expect a higher quality in terms of the colour or odour, for example. Some will expect to reliably receive their orders within 10 days, others within 8-12 weeks. You can expect the prices paid in these different situations to be different as well.

Basic requirements are becoming more and more stringent. Especially regarding sustainability, social responsibility and traceability. These are now expected by buyers.

Fairoils and Olvea are two companies that export sesame seed oil to Europe. Fairoils is a Kenyan supplier of a wide range of vegetable oils and related products. Its sesame seed oil is produced in Uganda. Olvea is a French firm that also supplies various vegetable oils. It has established a sesame seed oil processing facility in Burkina Faso, integrated with its shea butter operation.

Both companies publish details of their activities to improve sustainability, social responsibility and traceability. Besides considering price, quality and reliability, these businesses want to show how they go beyond the minimum requirements and give something back to the communities they work with.

The quotes below are taken from the Olvea and Fairoils websites. They describe what the companies are doing with local communities, and the benefits of those relationships. This is the kind of information that many consumers in Europe are looking for, so buyers here are interested in working with suppliers that are making a difference within their own supply chains. In many cases, certification can support and verify this. Both Fairoils and Olvea are FairForLife certified, for example. They are also good examples of the companies you are competing with to access the European market.