As edible oil prices in the local market surged after supplies from rival Ukraine stopped, India has contracted 45,000 tonnes of Russian sunflower oil at a record high price for shipments in April.
This import of sunflower oil from Russia could help India, the world’s biggest edible oil importer, ease the shortfall at a time when the availability of vegetable oils is stretched because of Indonesia’s decision to restrict palm oil supplies and lower soybean crops in South America.
Refiners bought crude sunflower oil at a record price of $2,150 a tonne in India for April shipments, including cost, insurance, and freight (CIF), compared with $1,630 before Russia invaded Ukraine, dealers said.
Before the war, sunflower oil was cheaper than rival palm oil, but as supplies from top exporter Ukraine stopped, buyers had to pay heavy prices.
The Black Sea accounts for 60% of the world’s sunflower oil output and 76% of exports. Indian buyers had not made purchases of Russian sunflower oil for nearly a month, but now they are placing orders as banks are opening letters of credit (LC) for the imports and are now paying in dollars.
Indian insurance companies are providing cover for vessels bringing sun oil from Russia. India imports sun oil mainly from Russia and Ukraine. It imports palm oil from Indonesia and Malaysia, whereas the bulk of soy oil is sourced from Argentina and Brazil.
India has now been trying to increase imports of sunflower oil from Argentina, said Sandeep Bajoria, chief executive of Sunvin Group, a vegetable oil brokerage and consultancy firm.