The troubles in Ukraine are already reverberating in India, disrupting the supplies of a crucial oil to Asia’s third largest economy– sunflower oil… Ukraine is the world’s biggest sunflower oil producer and India imports almost all of its sunflower oil from there. Sunflower oil is India’s second biggest imported edible oil after palm oil…
While Indian consumers so far haven’t been exposed to any direct impact from the crisis in Ukraine, commodities traders said that could change soon as the conflich is expected to increase the cost of one of their favorite oils for frying foods. Ukraine is the world’s biggest sunflower oil producer and India imports almost all of its sunflower oil from there. Sunflower oil is India’s second biggest imported edible oil after palm oil. “India is quite vulnerable to global prices as we are the largest importer and the effects of this crisis are now reflected in sunflower oil imports,” said Vijay Data, president of the Solvent Extractors’ Association of India, a leading industry body.
Sunflower is not the only commodity hit by conflict recently. Cumin prices rose across the globe as the civil war in Syria–one of the biggest exporters of the spice–strangled supply. Sunflower oil is considered healthier than palm oil and soybean oil. Sunflower oil imports to India have almost doubled over the last five years on the back of rising incomes and health awareness. “The supplies of sunflower oil have become uncertain as many shipments are getting delayed,” said Faiyaz Hudani, associate vice president of research at Kotak Commodity Services Ltd. Prices in the wholesale market have already risen 10 per cent to about 66,000 rupees per ton recently. It will take some time before those higher prices are passed on to consumers.
The supply interruption comes as prices of palm oil and soybean oil have been rising on concerns weather has hurt production in Brazil, Indonesia and Malaysia. Indians normally substitutes cheaper edible oils when there is a price rise, Mr. Hudani said, but now they will have no escape. “The Ukrainian crisis has added fuel to the already vulnerable situation,” he said. “Until the time the crisis ends, concerns will remain.”