India’s imports of sunflower oil to fall as Black Sea grain deal expires
By Rajendra Jadhav
MUMBAI (Reuters) – India’s imports of sunflower oil are likely to fall in the coming months as it becomes uncompetitive against rival oils due to rising prices after Russia withdrew from the Black Sea grain deal, industry officials told Reuters.
The drop in sunflower oil imports would force the world’s biggest buyer of vegetable oils to increase purchases of palm oil and soyoil to compensate.
A year-long deal allowing the safe Black Sea export of Ukraine’s grain expired on Monday after Russia quit and warned it could not guarantee the safety of ships, in a move the United Nations said would “strike a blow to people in need everywhere”.
Sunflower oil shipments to India could fall by around 30% from current levels, said Pradeep Chowdhry, managing director of Gemini Edibles and Fats India Pvt. Ltd, a leading Indian importer.
The Black Sea region accounts for 60% of world sunflower oil output and 76% of exports.
Spot prices have risen from $850 to $965 per metric ton in the past five weeks on expectations that the grains deal would lapse and on a rally in rival oils.
India typically imports around 250,000 metric tons of sunflower oil per month, mainly from Russia, Ukraine, Argentina and Turkey.
Earlier this year, Black Sea exporters were aggressively selling sunflower oil at competitive prices, which helped bring down inventories, said Rajesh Patel, managing partner at GGN Research, an edible oil trader and broker.
India could import around 275,000 tons of sunflower oil in July but from August imports could fall to around 200,000 tons, Patel said.
Ukraine traditionally accounted for more than half of India’s sunflower oil imports, but Russia has been its biggest supplier in the marketing year ending on Oct. 31, Solvent Extractors’ Association of India data shows.
Loading of big vessels at Ukrainian ports is not possible without the grain deal, said Sandeep Bajoria, CEO of Sunvin Group, a vegetable oil brokerage and consultancy.
“The deal’s expiry would force Ukrainians to ship sunoil from Romania, Bulgaria and other European countries but re-routing would bring down the volume,” Bajoria said.
Ukraine has in recent months been selling sunflower seeds to Romania and Bulgaria, where they are processed into oil that is exported to India, said a New Delhi-based dealer with a global trading house.
“The uncertainty in the sunoil market would force some refiners to switch to palm oil and soyoil, which are also available at competitive prices,” the dealer said.
India imports palm oil mainly from Indonesia, Malaysia and Thailand, while sourcing soyoil mainly from Argentina, Brazil and the United States.
(Reporting by Rajendra Jadhav; Editing by Tony Munroe and David Evans)
Recommended for you
