INDIA – India has turned to Russia for sunflower oil supplies to beef up local supplies which have been dwindling since the outbreak of the war between Russia and its neighbour Ukraine.
Reuters citing five industry officials reported that India had contracted 45,000 tonnes of Russian sunflower oil for shipments in April.
The shipments will provide much-needed relief to India’s local market which is already stretched because of Indonesia’s decision to restrict palm oil supplies and a lower soybean crop in South America.
The world’s biggest edible oil importer is, however, paying a premium of US$2,150 for a tonne of sunflower oil including cost, insurance, and freight (CIF).
Dealers paid US$1,630 for the same quantity of sunflower oil before Russia invaded Ukraine as supply was in plenty, particularly from neighboring Ukraine.
At the moment, shipments of more than 300,000 tonnes of sunflower oil from Ukraine to India are stuck as loading at Ukrainian ports is suspended, said a Mumbai-based dealer.
A reprieve is however expected later this month when a shipment of 160,000 tonnes of sunflower oil that left Ukraine before the outbreak of the war is expected to reach Indian shores.
Indian buyers were not making purchases of Russian sunflower oil for nearly a month, but now they are placing orders as banks are opening letters of credit (LC) for the imports, said a New Delhi-based dealer with a global trading firm.
“Indian buyers are paying in dollars. Indian insurance companies are providing cover to vessels bringing sunflower oil from Russia,” the dealer said.
Over the past few years, the Indian government has been trying to increase the production of domestic edible oil but has not managed to keep up with the demand.
That in turn has pushed up prices which have nearly doubled since 2017, as per government data.
Prices of packaged sunflower oil rose 4% sequentially in February, while those mustard oil moved up 8.7%.
Meanwhile, Soybean oil prices fell a marginal 0.4%, while vanaspati rose 2.7%. Groundnut oil was up 1%.
To secure its local supply, India has also been ramping up its imports from Argentina in order to bridge the shortfall occasioned by a number of factors, chief among them being the crisis in Ukraine.
“Even after the imports from Russia and Argentina, there would be shortfall of sunoil. Nobody can replace Ukraine’s shipments,” Sandeep Bajoria, chief executive of Sunvin Group, a vegetable oil brokerage and consultancy firm said.
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