India’s January Sunflower Oil Imports Rise To Record As Russia-Ukraine Fight For Market Share
India is the leading buyer of vegetable oil in the world and the south Asian nation is dependent on sunflower oil imports for its domestic needs. Sunflower oil constitutes nearly 16% of the total edible oil imports in the country.
Prior to the war in Ukraine, 70% of sunflower oil imported by India came from Ukraine and 20% came from Russia but owing to the war, imports have been severely affected. The war in Ukraine has made Russia and Argentina the major suppliers of sunflower oil to India.
Sunflower Oil Imports
The monthly sunflower oil imports in India averaged around 161,000 tonnes in the 2021/22 marketing year ended on 31st October 22. As per industry officials, India is expected to import a record 473,000 tonnes of sunflower oil in January, more than tripling its monthly average as top exporters Russia and Ukraine work to reduce stockpiles. India’s record imports came as sunflower oil’s discount as compared to its rival soy oil widened to its highest level in 9 months.
Rajesh Patel, a Managing Partner at GGN Research said, “Sunflower oil was being traded at discount to soy oil in December. The discount made it lucrative for Indian buyers.” 60% of global sunflower oil production and 76% of exports come from the Black Sea.
The Reason For The increase
The increase in imports will aid the major exporting nations that trade across the Black Sea in reducing their stocks, but it may have an adverse effect on India’s imports of palm oil and Malaysia’s palm oil prices. The price differential between sunflower oil and soy oil increased to about $100 per tonne in the final week of November and the first few days of December, which was the highest since February 2022 as the rival producers Russia and Ukraine tried to ship more after a deal to ensure safe passage for Black Sea shipments was extended.
Sandeep Bajoria, president of the International Sunflower Oil Association, said that the extension of the Black Sea Grain initiative allowed exporters to move stockpiles at the ports and sign new contracts as well.
The Vegetable Oil Movement In Russia, Ukraine, And India
A Singapore-based trader with a global trade house said that Russia is offering sunflower oil at a competitive price to liquidate the stocks while its neighboring country, Ukraine is selling sunflower seeds along with the oil as logistical issues have made it difficult to crush all available seeds.
According to the dealer, Ukraine has been selling seeds to Romania and Bulgaria, which are processing the seeds and exporting the oil to India. A leading vegetable oil importer said that India’s decision for duty-free imports of sunflower oil until March 2024 has made buying sunflower oil more attractive for refiners in the country, “Sunflower imports would reduce palm oil purchases this quarter. In southern India, sunflower oil is likely to replace palm oil.”
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