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The prevailing military crisis in Ukraine has escalated the prices of imported crude sunflower oil. While the Russian troops have started tightening its grip over Ukraine, the import shipments from the latter are getting delayed thereby pushing up the prices of the edible oil by about 10-12 per cent in less than a month.
Sunflower oil comprises about 10 per cent of India’s total edible oil imports of over ten million tonnes per annum. As per the Solvent Extractors’ Association of India (SEA) data, about 973,126 tonnes of sunflower oil was imported during 2012-13, mostly from Ukraine – the largest producer of sunflower seed in the world.
As per the data provided by the SEA, the imported crude sunflower oil prices have jumped from $895 per tonne (CIF, JNPT port) in January 2014 to over $ 955-960 by March 3, 2014.
In the domestic market, the prices have touched Rs 66,000 per tonne from Rs 60,500 a month ago.
“Due to tension in Ukraine the supplies of sunflower oil have become uncertain. Many shipments are getting delayed. This has jacked up the prices in the international as well as in the domestic market,” said Biren Vakil, commodity analyst from Ahmedabad.
The SEA data showed that so far in the current oil year (November-October), India has imported 362,736 tonnes of sunflower oil during November 2013-January 2014 period, higher by 1,15,951 tonnes (or about 46 per cent) from the same period previous year.
However, traders see demand slowing down at the prevailing higher prices thereby giving a resistance to the further increase in prices.
In addition to the escalating tension between Ukraine and Russia, climatic fluctuations in Indonesia – a major producer of palm oil has caused overall bullish sentiment in the entire imported edible oil complex including crude palm oil. The prices of imported palm oil have jumped by about $ 100 per tonne (or over 12 per cent) in past one month to $ 890 per tonne.
“The Ukrainian crisis has added fuel to the already-burning prices. Sunflower oil supplies are feared to get adversely affected due to escalating cross-border tension,” said Laxmichand Aggarwal, past chairman of The Central Organisation for Oil Industry and Trade (COOIT).
According to him, climatic extremities in India and Indonesia may pose a major challenge for the edible oil market in the coming months.
“There are fears of damage to mustard crop in India due to recent hailstorm in growing regions. Also, weather has been uncertain in Indonesia, thereby causing increase in the palm oil prices. The overall sentiment is bullish in the edible oil complex,” he said.
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