Sunflower oil prices, which have been tracing a downward course in the last few months, could increase if the crisis continues for the next few months in Ukraine, the world’s leading producer of sunflower seeds.

Sunflower oil prices are currently ranged between $930-$940 a tonne, while palm oil prices are ruling at about $910 a tonne.

“Ukraine registered a rich crop last year. As we are still getting last year’s crop, there has not been a problem yet (from Ukraine). But if the crisis continues beyond the new crop season (July-August) and harvest period (September-October), there could be disruptions in shipments from Ukraine, which could firm up the prices about six months from now,” Satendra Aggarwal, Chief Operating Officer of Ruchi Soya Industries, said.

The ₹30,000-crore company is one of India’s leading importer and maker of edible oil, with a share of 18 per cent in the Indian edible oil market, that is estimated at 18 million tonnes. Ruchi and Anand Wilmar dominate the market with a combined share of over 36 per cent.

Market share

Sunflower oil has a share of about 10 per cent of India’s edible oil imports of about 10.5 million tonnes. India imports between 1.2 and 1.4 million tonnes of sunflower oil, mostly from Ukraine and Russia. India’s sunflower oil market is estimated at ₹18,000 crore and expected to grow with a CAGR of 10 per cent up to 2016-17.

“As sunflower oil prices fell, the price difference between this oil and soya oil narrowed, which boosted consumption of sunflower. We also saw palm oil import declining due to the price spreads in favour of soft oils. Hence we may end up importing more (sunflower) this year,” Aggarwal said.

Bridging gap

The price difference between sunflower and palm oil also similarly narrowed to about $30 a tonne currently from $100 a tonne some months earlier and $400 about a year ago.

India imported about 1.45 million tonnes of sunflower oil last fiscal, up from 1.1 million tonnes in the previous year, and this year it may cross the 1.5 mt mark, if there are no breaks in shipments from Ukraine.

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