Russia-Ukraine Conflict: 380,000 Tonnes Of Sunflower Oil Heading To India Stuck At Ports

According to dealers, there is no clarity when loading of the cargoes, worth $570 million at current prices, from Ukraine and Russia will resume

India has contracts for about 510,000 tonnes of sunflower oil from Black Sea region for shipments in February and March, but only 130,000 tonnes have been loaded so far in February. Image: Getty

New Delhi: As crude oil prices have hit $105 a barrel following Russian invasion in Ukraine, rates of edible oil in India now likely to go up, as 3,80,000 tonnes of sunflower oil shipments from the Black sea region to the country are stuck at several ports.

The sunflower oil shipments to India have been stalled as ports suspended operations amid Russia-Ukraine conflict, according to a report by Reuters.

There is no clarity when loading of the cargoes, worth $570 million at current prices, from Ukraine and Russia will resume, pushing Indian buyers to replace sunflower oil with soybean oil and palm oil for March and April shipments, four dealers have told the news agency.

The shipment delays could create a sunflower oil scarcity in the country if loading is not resumed in the next few weeks, said Sandeep Bajoria, chief executive of Sunvin Group, a vegetable oil brokerage and consultancy firm.

India has contracts for about 510,000 tonnes of sunflower oil from Black Sea region for shipments in February and March, but only 130,000 tonnes have been loaded so far in February, the dealers said.

The Black Sea region accounts for 60 per cent of world sunflower oil output and 76 per cent of exports, and India is the top global edible oil importer.

The Centre is now mulling to source alternative oils, mainly Malaysian palm oil and US soybean oil futures, which are already trading near record highs.

“We don’t know what will happen to the remaining quantity. When it will be shipped,” Govindbhai Patel, managing director of trading firm G.G. Patel & Nikhil Research Company, told Reuters.

Although India buys palm oil from Indonesia and Malaysia, it mainly imports soybean oil from Argentina and Brazil, and sunflower oil from Russia and Ukraine.

India imported 125,024 tonnes of sunflower oil in November 2021, 258,449 tonnes in December 2021, and 307,684 tonnes in January 2022, according to data from the Solvent Extractor’s Association (SEA).

The country, which gets more than two-thirds of its edible oil supplies through imports, buys about 1.25 million tonnes of cooking oil every month.

Palm oil is usually the dominant oil used in India, but importers have had to buy more soybean oil and sunflower oil this year due to reduced supplies of palm oil from top exporter Indonesia, which pushed palm prices to record highs.

Soybean oil supplies are also limited as drought has hit soybean crops in South America. This could force Indian buyers to make more purchases of US soybean oil, a New Delhi-based dealer said.