India Buys Record Amount Of Sun Oil As Ukraine-Russia Fight For Market Share Cuts Price

Indians bought a record 500,000 metric tons of sunflower oil for June delivery, as competition between leading suppliers Russia and Ukraine made it cheaper than soy oil and palm oil, two leading buyers and a customs official told Reuters.

Higher sunflower oil purchases by the world's biggest importer of vegetable oils will help to reduce sunflower oil inventories in the Black Sea region and lift sun oil prices.

A leading buyer who declined to be named said sun oil was trading at a discount to soy oil and even palm oil, which was tempting Indian buyers especially given robust demand in southern states.

A few weeks ago, crude sun oil was available at USD 940 a metric ton, including cost, insurance and freight (CIF), in India for June delivery, while soy oil and palm oil were offered at around USD 1,015 and USD 950 a ton, respectively, dealers said.

Sun oil usually holds a premium of more than USD 100 per ton over soy oil and palm oil, Rajesh Patel, managing partner at edible oil trader and broker GGN Research, said.

Russia and Ukraine, as well as another big supplier Argentina, were aggressively competing and offered sun oil at a lower price than other oils, another buyer based in Hyderabad said. He has reduced palm oil and soy oil purchases to make space for sun oil.

The currencies of Russia and Ukraine have depreciated since the war started in February 2022, allowing them to offer sunflower oil at competitive prices in dollar terms, the buyer said.
Russia and Ukraine account for more than 70 per cent of global shipments of sun oil.

Around 320,000 metric tons of sunflower oil have been discharged at various Indian ports so far this month, said a customs official, who also declined to be identified as he was not allowed to speak to the media.

India on average bought 250,000 tons of sunflower oil every month in the last marketing year, mostly from the Black Sea region.

The industry will need time to refine and distribute the 500,000 tons of sunflower oil imported in June, which will reduce imports in July, the Hyderabad-based buyer said.

In January 2023, India had imported a record 461,458 tons of sunflower oil.

India buys palm oil mainly from Indonesia, Malaysia and Thailand, while it imports soy oil from Argentina, Brazil and the United States.