India stops buying sunflower oil due to the conflict in the Black Sea region

Ports and producers have accumulated approximately 380 thousand tons of sunflower oil worth 5 570 million, intended for shipment from the Black Sea region to India. At the same time, new contracts are not concluded due to the shutdown of ports after the Russian invasion of Ukraine, four traders told Reuters.

It is not yet clear when it will be possible to resume deliveries, so Indian buyers may reorient to purchase soybean and palm oil with delivery in March – April. This will support palm oil prices in Malaysia and soybean prices in the United States, which are already trading at near-record levels.

The Black Sea region accounts for 60% of global production and 76% of sunflower oil exports, and India is the world's largest importer of vegetable oils. It has contracts for the supply of 510 thousand tons of black sea sunflower oil in February – March, but in February only 130 thousand tons were shipped. the fate and timing of shipment of the other batch are still unknown.

India buys palm oil from Indonesia and Malaysia, soybean oil - mainly from Argentina and Brazil, sunflower oil – from Russia and Ukraine.

If supplies do not recover in the coming weeks, India will experience a shortage of sunflower oil, said the executive director of brokerage firm Sunvin Group.

According to the sea Association, in November 2021, India imported 125,024 thousand tons of sunflower oil, in December – 258,449 thousand tons, in January 2022 – 307,684 thousand tons. the country imports approximately 1.25 million tons of vegetable oils per month, which is 2/3 of consumption.

India usually uses palm oil the most, but this year, due to record high prices for it caused by a reduction in supplies from Indonesia, which is the world's largest exporter, Indian buyers were forced to increase imports of soybean and sunflower oil.

Soybean oil reserves are also limited, as the drought has damaged soybean crops in South America. According to a trader from New Delhi, this may force Indian buyers to step up purchases of soybean oil from the United States.