New Delhi: India is set to boost its sunflower oil imports from Argentina and Russia due to worries that shipments from Ukraine, the biggest supplier, will be disrupted if Russia invades.
The South Asian nation, also the world’s biggest importer of palm and soybean oils, bought about 60,000 tons of sunflower oil from Russia and Argentina for shipments in February and March, according to Sandeep Bajoria, president of the International Sunflower Oil Association.
Indians are “really worried” that supplies from Ukraine will be curtailed, said Bajoria, who is also the chief executive officer of Mumbai-based Sunvin Group. “The trade is normal as of now but if the conflict flares up, it’s going to impact global vegetable oil prices.”
The U.S. is putting as many as 8,500 troops on heightened alert for deployment to bolster NATO forces in Eastern Europe as Russian troops mass on Ukraine’s borders. The move adds to tensions over Ukraine after Secretary of State Antony Blinken and Russian Foreign Minister Sergei Lavrov held inconclusive talks in Geneva last week. Russia has denied it intends to invade its neighbor.
Ukraine and Russia account for almost 80% of the world’s sunflower oil shipments. India bought 1.89 million tons of the crude variety of the cooking oil in the year ended October, with Ukraine supplying almost 74% and Argentina and Russia each accounting for about 12%.
“If the Russia-Ukraine tension escalates, then sunflower oil will go through the roof,” said Gnanasekar Thiagarajan, head of trading and hedging strategies at Kaleesuwari Intercontinental. It will also push up prices of all edible oils, he said.
Higher prices will hit Indian consumers as the country imports about 70% of its total edible oil needs. Inbound shipments were almost flat at around 13 million tons in the year to October, with palm oil accounting for 63%, soyoil 22% and sunflower oil 14%.
Global vegetable oil prices have already surged in the past months on supply concerns, and any disruption in sunflower oil shipments from Ukraine could add to the already bullish sentiment. Benchmark palm oil futures, which spiked to an intraday record on Monday, have rallied 63% in the past year, while soybean oil and canola prices have jumped 46% and 81% respectively.-Bloomberg