India buys Russian sun oil at record high price as Ukrainian supplies cut off

By Rajendra Jadhav

MUMBAI (Reuters) – India has contracted 45,000 tonnes of Russian sunflower oil at a record high price for shipments in April, five industry officials told Reuters, as edible oil prices soared in the domestic market after supplies from rival Ukraine were cut off.

Sunflower oil from Russia, the world’s largest importer of edible oils, could help ease shortages at a time of increasing pressure on vegetable oil availability due to Indonesia’s decision to restrict palm oil supplies and reduce South America’s soybean crop.

“Since ship loading is not possible in Ukraine, buyers are trying to secure supplies from Russia,” said Pradeep Chowdhury, Managing Director of Gemini Edibles & Fats India Pvt. Ltd., which has contracted 12,000 tons of Russian sunflower oil for April shipments.

Refiners bought crude sunflower oil at a record $2,150 per tonne, including cost, insurance and freight (CIF), in India for April shipments, compared with $1,630 before Russia invaded Ukraine, dealers said.

Chowdhury said sunflower oil was cheaper than competing palm and soybean oil before the conflict, but that with supplies from Ukraine, the largest exporter, having been cut off, buyers have to pay a steep premium.

The Black Sea accounts for 60% of the world’s production of sun oil and 76% of exports.

A New Delhi-based trader with a global trading company said Indian buyers had not bought Russian sunflower oil for nearly a month, but were now placing orders as banks opened letters of credit (LC) for imports.

“Indian buyers pay in dollars. Indian insurance companies provide cover for ships that bring sun oil from Russia,” the trader said.

A Mumbai-based trader said shipments of more than 300,000 tons of sunflower oil from Ukraine to India were halted as loading at Ukrainian ports halted.

India mainly imports sun oil from Russia and Ukraine. It imports palm oil from Indonesia and Malaysia, while the bulk of its soybean oil comes from Argentina and Brazil.

India is now trying to increase its imports of sunflower oil from Argentina, Sandeep Bagoria, CEO of Sunvin Group, a vegetable oil brokerage and advisory firm, said.

“Even after imports from Russia and Argentina, there will be a shortage of sun oil. No one can replace Ukrainian shipments,” Bagoria said.

The New Delhi-based trader said that India consumes about 200,000 tons of sunflower oil, but the refineries can currently import only about 80,000 tons.

The trader said consumers are being forced to switch to soybean oil, rapeseed oil and peanut oil because supplies of sunflower oil are limited.

“Sunflower oil is very expensive. This forces price-sensitive buyers to switch to other oils,” Bagoria said.

(Editing by Sanjeev Migliani; Editing by David Evans)

(The title and image for this report may have been reformulated only by the Business Standard staff; the rest of the content is automatically generated from a shared feed.)

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