India has begun to focus on importing more soyabean oil with the Russia-Ukraine war prolonging, thus affecting sunflower oil supplies from both the major two producers.

Brazil, the top global producer of soyabean oil, seems to have emerged as a major beneficiary.

During the first quarter of 2022, nearly three-fourths of the Brazilian soyabean oil exports have headed to Indian ports.

In an interaction with BusinessLine via e-mode, Daniele Siqueira, Market Analyst in Brazil’s AgRural, estimated exports of soyabean oil to India at 3.48 lakh tonnes (lt) during the first quarter against 78,485 tonnes in the same period a year ago.

India made up 72.83 per cent of total exports of soyabean oil from Brazil, the highest in five years, against 37.24 per cent in the first quarter of last year.

Stating that soyabean oil exports from Brazil were the largest since 2008, she said the exports were spurred by a spike in India’s purchases.

Limited supplies

Siqueira felt that Brazilian soyabean oil is replacing palm oil and sunflower oil. However, she said, Brazilian supplies are limited.

According to the US Department of Agriculture, Brazil is expected to produce 130.28 million tonnes (mt) of soyabean this season to August, and could probably lose its top slot as the US is projected to produce 130.59 mt. The South American nation is estimated to export 83.14 mt of soyabean, leaving some 50 mt to be crushed within the country.

Soyabean oil production in Brazil has been estimated at 10.48 mt with 9.59 mt likely to be consumed domestically.

BV Mehta, Executive Director of Solvent Extractors’ Association of India (SEA), said: “I won’t say Brazil’s soyabean oil is replacing sunflower and palm oil. But we need oil as lesser sunflower oil is available. That is why India is sourcing a larger part of soyabean oil from other parts of the world.”

Soyabean oil is being imported in larger quantities as palm oil is becoming more expensive, and a lesser quantity of sunflower oil is available in the global market, he said.

DN Pathak, Executive Director of SOPA (Soybean Processors Association of India), said soyabean oil cannot replace palm oil, which is mostly used in HoReCa (hotel, restaurant and catering) segment. Sunflower oil is being sold at a premium.

He said the decrease in the import of sunflower oil could be the reason for the increase in soyabean oil import from Brazil.

India tops in Brazil’s exports

A comparison of the Brazilian export of soyabean oil to India during the first quarter of the previous years shows that India has remained a major export destination.

India imported 83,414 tonnes (41.71 per cent) in the first quarter of 2020, 64,833 tonnes (37.68 per cent) in the same period in 2019, and 1.50 lt (50.71 per cent) in January-March 2018.

Only in 2020, Bangladesh overtook India in terms of soyabean oil export from Brazil. For Brazil, India and Bangladesh have remained major export destinations for the last five years.

Brazil vs Argentina

Data available with the SEA of India show that the quantity of soyabean oil imported from Brazil has gone up steadily during the first quarter of 2022. This is, in spite of exports from Argentina increasing during the period.

In January this year, India imported 85,500 tonnes (nil) of Brazilian soyabean oil (degummed), and 2.50 lt (88,667 tonnes) of Argentine oil was imported.

In February, Brazilian export increased to 49,339 tonnes (15,500 tonnes), and Argentine export to 2.45 lt (2.34 lt).

In March, there was a significant increase in the import of soyabean oil (degummed) from Brazil and a reduction from Argentina. India imported 87,488 tonnes (33,170 tonnes) of Brazilian oil and 1.68 lt (2.50 lt) of Argentine oil.

Besides its prices more than trebling in the last two years, palm oil supplies have become unreliable with Indonesia’s u-turn in policies.

Currently, the landed cost of crude palm oil imports is $1,900 a tonne, compared with $1,998 for soyabean oil. No quotes are being offered for sunflower oil, though reports say the landed cost is over $2,100.

(With inputs from Prabhudatta Mishra in New Delhi)

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