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Shipments of sunflower oil to India have started normalising after imports from war-torn Ukraine resumed beginning September after a gap of four months, leading to further normalisation of supplies.
Ukraine has been the largest supplier of sunflower oil to India.
However, after the Russia-Ukraine war broke out in February, supplies from Ukraine dwindled as Russia denied it access to the Black Sea ports.
However, a deal facilitated by Turkey and the United Nations has restarted food supplies from Ukraine to the rest of the world.
India imports 1.9-2.5 million tonnes of crude sunflower oil, of which almost 85 per cent comes from Ukraine and Russia.
In September, India imported 29,370 mt of sunflower oil from Ukraine, close to 32,178 mt imports of the edible oil from Russia during the month. Argentina has remained the top supplier of edible oil since the war broke out, with 60,921 mt imports in September.
Argentina, one of the biggest producers in the world after Ukraine and Russia, exports 300,000-400,000 tonnes of sunflower oil to India.
India has also offered to unilaterally reduce import duty on sunflower oil under the under the existing preferential trade agreement (PTA) with Mercosur countries to secure long-term contracts with Argentina.
Argentina has been targeting China for sunflower oil exports since India has tariff quota as well as plant quarantine restrictions.
India has also offered to do away with the stringent testing requirements under the existing PTA with the grouping.
India signed in 2004 a PTA with Mercosur, the Latin American trading bloc with Argentina, Brazil, Paraguay, and Uruguay as its members.
“We had signed an MoU with the Argentinian trade promotion body CIARA some years back, under which a delegation of Indian importers, processors and others are planning to go to the country sometime in March 2023 to explore possibilities of further tie-ups,” B V Mehta, director general of Solvent Extractors Association (SEA) of India, told Business Standard.
As a consequence of the war, landed price of imported sunflower oil in Mumbai markets, which before the war was quoting around $1400-$1500 per tonne (CIF), climbed to almost $2,150 per tonne in March, April and May, an increase of over 40 per cent in a span of few weeks.
Presently, the landed price of sunflower oil in Mumbai markets in October 2022, is around $1,411, which is almost the same price which prevailed in October 2021.
Going forward, market players are optimistic of prices remaining within a range due to general weakness in the edible oil complex and steady supplies from various production centres.
“The Argentinean market looks promising, but it remains to be seen whether they will be able to meet all our requirements.
"Also, freight is an issue with Argentina due to its distance as compared to Ukraine and Russia, which are nearer,” another industry player said.
