India‘s January sunflower oil imports are set to surge to a record 473,000 tonnes, nearly triple average monthly imports as top exporters Russia and Ukraine seek to reduce stockpiles, industry officials told Reuters.
Record imports by India, the world’s biggest vegetable oil importer, come as sunoil’s discount to rival soyoil widened to the highest level in nine months.
The import surge will help key Black Sea producing countries in reducing their stocks, but could dampen India’s palm oil imports and weigh on Malaysian palm oil prices.
“Sunoil was trading at discount to soyoil in December. The discount made it lucrative for Indian buyers,” said Rajesh Patel, managing partner at GGN Research.
In the last week of November and early December, sunoil’s discount to soyoil widened to around $100 per tonne, the highest since February 2022, as warring producers Russia and Ukraine tried to ship more after a deal to provide safe passage to Black Sea shipments was extended.
The deal allowed exporters to move stuck stockpiles and sign new contracts as well, said Sandeep Bajoria, president of the International Sunflower Oil Association.
The Black Sea accounts for 60% of world sunoil output and 76% of exports.
India’s monthly sunoil imports averaged around 161,000 tonnes in 2021/22 marketing year ended on Oct. 31.
Russia is currently offering sunoil at competitive prices to liquidate stocks, while Ukraine is selling sunflower seeds along with oil as it is struggling to crush all available seeds due to logistical issues, said a Singapore based dealer with a trade house.
Ukraine has been selling seeds to Romania and Bulgaria, which are processing seeds and exporting oil to India, the dealer said.
India’s decision to allow duty-free imports of sunoil until March 2024 is also making sunoil buying attractive for Indian refiners, said a leading Indian vegetable oil importer.
“Sunflower imports would reduce palm oil purchases this quarter. In southern India sunoil is likely to replace palm oil,” he said.