Sunflower oil prices to burn a hole if Russia-Ukraine crisis blows up
Indian sunflower oil makers are hoping that the war-like situation between Russia and Ukraine resolves smoothly soon so that the edible oil shipments resume soon from the latter, said senior industry officials.
image for illustrative purpose
Chennai, Feb 22 Indian sunflower oil makers are hoping that the war-like situation between Russia and Ukraine resolves smoothly soon so that the edible oil shipments resume soon from the latter, said senior industry officials.
They also said if the shipments do not come from Ukraine, then Russia and Argentina are there as alternate sources and there may not be any major impact on the retail prices of sunflower oil.
But if there is a war between Russia and Ukraine, then the former may block the latter's shipments. And if there are sanctions against Russia, then it will be a double whammy for India, the industry officials said, expressing hope that the situation doesn't develop so.
"India imports about two lakh ton per month of sunflower seed oil and at times it goes up to three lakh tons per month. India is dependent on edible oil imports to the tune of about 60 per cent. Any global development will have an impact," Sudhakar Desai, President, Indian Vegetable Oil Producers' Association (IVPA), told IANS.
According to Desai, Indian importers can look at alternate sources like Russia and Argentina.
Like Ukraine, Russia is also a major grower of sun flower and producer of sun seed oil.
"Seventy per cent of India's sunflower oil imports is from Ukraine, 20 per cent from Russia and 10 per cent from Argentina," Sandeep Bajoria, CEO, Sunvin Group, a research consultancy in vegetable oils, oilseeds trade and industry, told IANS.
He said Ukraine produces about 170 lakh tons of sunflower seeds, Russia about 155 lakh tons and Argentina about 35 lakh tons.
The oil yield will be about 42 per cent when crushed, Bajoria added.
"The price of oil sold by these two countries - Ukraine and Russia - is almost the same. The global price ranges about $1,500-$1,525 per ton," Desai, also the CEO of Emami Agrotech Ltd, said.
Noting that there is sufficient stock of sunflower oil in India for the next two months, he said that for the past 20 days shipments from Ukraine were getting delayed and the vessels were getting bunched up.
"If the Russia-Ukraine trouble continues for two/three more weeks, then there will be pressure on the Indian market as the oil stock will not get replenished. We expect 1.5 lakh-2 lakh ton of sunflower seed oil imports between February-March from Ukraine," Desai said.
According to Bajoria, not a single shipment of sunflower oil has left Ukraine in February.
South India is the major market for sunflower oil.
According to the Indian Embassy in Ukraine, India's bilateral trade turnover was $2.52 billion in 2019-20 (exports were $463.81 million and imports were $2,060.79 million).
Major exports from India are pharmaceutical products, reactors/boiler machinery, mechanical appliances, oil seeds, fruits, coffee, tea, spices, iron, steel and others.
From Ukraine, the major export to India is sunflower oil, followed by inorganic chemicals, iron and steel, plastics, chemicals, and others.
India is Ukraine's largest export destination in the Asia-Pacific and the fifth largest overall export destination, the Indian Embassy said.
(Venkatachari Jagannathan can be reached at [email protected])
