The world’s biggest sunflower oil buyer typically sources most of its imports from the Black Sea region via the Red Sea. However, recent Houthi attacks have compelled shipping companies to reroute trade between Europe and Asia around Africa, increasing time and costs.
India’s anticipated reduction in sunflower oil imports in the upcoming months is a result of escalating prices triggered by a surge in freight rates, compelling buyers to opt for alternative vegetable oils available at discounted rates, according to information provided by traders to Reuters.
As the premier global sunflower oil consumer, India traditionally procures the majority of its imports from the Black Sea region via the Red Sea. However, recent Houthi attacks have forced shipping companies to redirect trade routes between Europe and Asia around Africa, leading to increased time and expenses.
The heightened freight rates have caused the landed cost of sunflower oil in India to surpass that of soyoil for the first time in nearly a year, noted Sandeep Bajoria, CEO of Sunvin Group, a vegetable oil brokerage. Bajoria stated, “Sunoil imports were robust in the last few months due to the price advantage it had over soyoil. However, it lost this advantage because of rising freight.”
Current figures reveal that crude sunflower oil imports are being offered at approximately $943 per tonne, including cost, insurance, and freight (CIF), for February delivery in India. In comparison, crude soyoil is priced at around $935, and crude palm oil at $933, as reported by dealers.
Two months ago, sunflower oil was trading at a $120 per ton discount to soyoil, motivating Indian traders to augment sunoil imports. However, in December, sunoil imports more than doubled from the previous month to reach 260,850 tons.
While soyoil imports in December rose by 1.8% to 152,650 tons, they remained considerably below the average imports of 306,000 tons in the marketing year concluding in October 2023.
Rajesh Patel, managing partner at edible oil trader and broker GGN Research, anticipates a potential decline in sunflower oil imports to 225,000 tons in January, with soyoil imports expected to exceed 230,000 tons. He stated, “In the coming months, sunflower oil imports would go down to around 200,000 tons if the current price trend continues.”
India primarily acquires palm oil from Indonesia, Malaysia, and Thailand, while soyoil and sunflower oil imports come from Argentina, Brazil, Russia, and Ukraine. A Mumbai-based dealer from a global trade house noted that Argentina is presently offering sunoil at more competitive prices than supplies from Black Sea region countries. The disruptions in Red Sea shipping are likely to prompt India to increase soyoil purchases from South America and decrease sunoil imports from the Black Sea region, he added.
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