Russia-Ukraine War: Edible Oil To Become Costlier In India
New Delhi: The price of edible oils, especially sunflower oil will soar in India as a result of the Russia-Ukraine conflict. Traders and solvent manufacturers have warned of prices moving northward due to disruption of the supply chain.
India will be hit harder than others as 90 per cent of the country’s sunflower oil imports are from Russia and Ukraine.
As per the Commerce Ministry data, India consumes around 2.5 million tonnes (mt) of sunflower oil annually but it only produces 50,000 tonnes of sunflower oil and imports the rest.
Sunflower oil accounts for 14 per cent of all edible oil imports. It is the fourth most consumed edible oil, after palm (8-8.5 mt), soyabean (4.5 mt) and mustard/rapeseed (3 mt). The price of sunflower oil rose from `98 a litre in February 2019 to `161 February 2022.
India’s sunflower oil imports is 2.5 mt in 2019-20 (April-March) and 2.2 mt in 2020-21, valued at $1.89 billion and $1.96 billion, respectively. From Ukraine it imports 1.93 mt (worth $1.47 billion) in 2019-20 and 1.74 mt ($1.6 billion) in 2020-21, with Russia it imports around 0.38 mt ($287 million) and 0.28 mt ($235.89 mt).
Atul Chaturvedi, president of the Solvent and Extractors Association (SEA), the apex body of edible oil manufacturers told The Indian Express that prices are expected to go northward. “Yes, definitely markets have the serious potential of moving northwards. Sunflower oil comes from Ukraine and Russia and its supply chain will be disturbed. We import almost 2.0 lakh mts of sunflower oil per month,” Chaturvedi was quoted as saying.
Roop Bhootra CEO, Investment Services, Anand Rathi Shares and Stock Brokers told News18, “Higher oil prices are always a risk factor for India which has a large import bill. However, current move in oil prices are mainly due to Ukraine crisis and should cool off in some time. Also, incremental ethanol blending for which Government is pushing very aggressively should also help in cushioning some impact in medium term.”
Edible oil prices have been climbing unabated globally and in India since the onset of the pandemic. The climb has been so steep that the Indian government had to take several measures to rein in the increase in prices. In 2021, unfavourable weather conditions in major oil-exporting countries like Malaysia, Indonesia, Ukraine, Argentina and Russia, and labour shortage due to the pandemic impacted the production of edible oil.
Soyabean oil prices soared last year on the back of dry weather conditions in the largest exporter Argentina and high demand from India and China. Sunflower oil prices rose due to drought-like conditions in Russia and Ukraine, a News18 report explained.