Imports of Sunflower Oil Reach a Record as Russia and Ukraine Compete for Monopoly Status

Chennai: India, the largest vegetable oil importer in the world, increased its imports when soybean oil's discount to rival Sunflower Oil increased to its widest point in nine months. As main suppliers Russia and Ukraine aim to cut stockpiles, India's January Sunflower Oil imports are expected to jump to a record of approximately 472,000 tonnes, about triple the typical monthly imports, according to industry officials.  The increase in imports may assist important Black Sea-Producing nations in lowering their stocks, but it may also harm India's palm oil imports and Malaysia's palm oil pricing.

In the Indian domestic market, Sunflower Oil traded at a discount to soybean oil in December 2022, making it profitable for Indian consumers. The price differential between Sunflower Oil and soyabean oil increased to its highest level since February 2022 in the final week of November and the first few days of December as rival producers Russia and Ukraine tried to ship more after a deal to provide safe passage for Black Sea shipments was extended.

60% of the world's Sunflower Oil production and 76% of its exports come from the Black Sea, and the agreement permitted exporters of Russia and Ukraine to transfer inventories that had become blocked and sign new contracts. While Ukraine is selling Sunflower seeds together with oil as it struggles to crush all available seeds due to logistical challenges, Russia is selling Sunflower Oil at competitive prices to dispose of supplies. Ukraine has been supplying seeds to Romania and Bulgaria, which process the seeds and send the oil to India.

As per the ChemAnalyst database, the prices of Sunflower Oil would further decrease in the Indian domestic market, backed by an increase in imports from major exporting countries, primarily Russia and Ukraine. Moreover, Indian refiners are attracted to purchasing goods because India decided to permit duty-free imports of sunflower oil till March 2024. Additionally, this quarter's palm oil purchases would be decreased by imports of sunflower. Sunflower Oil is set to displace palm oil in southern India.