BY Priti Naik
Nearly 380,000 tonnes of sunflower oil shipments from the Black Sea region to India are stuck at ports. With this the new purchases have stalled after ports suspended operations following the Russia’s invasion of Ukraine.
As of now, there is no clarity as to when loading of the cargos worth $570 million at current prices from Ukraine and Russia will resume. This is pushing Indian buyers to replace sunoil with soyoil and palm oil for March and April shipments. The Black Sea region accounts for 60% of world sunoil output and 76% of exports, and India is the top global edible oil importer.
India’s pivot to alternate oils could further support Malaysian palm oil and US soyoil futures, which are already trading near record highs. India has contracts for about 510,000 tonnes of sunoil from Black Sea region for shipments in February and March, but only 130,000 tonnes have been loaded so far in February.
Although India buys palm oil from Indonesia and Malaysia, it mainly imports soyoil from Argentina and Brazil, and sunflower oil from Russia and Ukraine. The shipment delays could create a sunflower oil scarcity in India 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.
Palm oil is usually the dominant oil used in India, but importers have had to buy more soyoil and sunflower oil this year due to reduced supplies of palm oil from top exporters Indonesia, which pushed palm prices to record highs. Soyoil supplies are also limited as drought has hit soybean crops in South America. This could force Indian buyers to make more purchases of US soyoil, a New Delhi-based dealer said.
India imported 125,024 tonnes of sunoil 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.