The Indian sunflower oil industry is worried if the escalation of tensions between Russia and Ukraine could delay the import and raise the price of the popular edible oil.
The stakes are high: Ukraine and Russia together meet about 90% of India’s sunflower oil needs. If things go awry, prices could sky-rocket, industry watchers warned on Tuesday.
There was already a delay in the shipment of the essential oil, they told DH.
“We are very anxious and are watching the situation carefully. A slight delay is fine but if it (supply) stops then there will be a shortage and prices can go haywire,” said Sandeep Bajoria, the CEO of Sunvin Group, a consultancy in oils and oilseeds.
Out of the total sunflower oil import of 25 lakh tonnes, Ukraine supplies 17 lakh, Russia sends 2 lakh and Argentina ships 3 lakh, Bajoria said, pegging India’s sunflower oil trade with the two countries at roughly $3 billion.
Other industry denizens have started thinking about a plan B. “If there is supply disruption, then India will have to look for alternative destinations, maybe from Argentina or Russia itself,” said Sudhakar Desai, the president of the Indian Vegetable Oil Producers’ Association.
Desai said that Ukraine produced about 170 lakh tonnes of sunflower seeds, while Russia accounted for 155 lakh tonnes and Argentina about 35 lakh tonnes.
Currently, the sunflower oil is priced at $1,550 per tonne, and if things get worse, this might shoot up, Desai said.
Bajoria said that if push came to shove, then India might even start importing substitutes such as palm oil and soya oil. Desai said the country could also look at mustard oil and rice bran oil too.
India imported about 13.2 million tonnes of edible oil last year, out of which sunflower oil constituted about 2-2.2 million tonnes, Desai said.
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