India set for record soyoil imports as Russia-Ukraine war disrupts sunflower shipments

India’s soyoil imports are set to hit a record high in August as competitive prices prompt refiners to boost purchases for festive ​demand, while disruptions to sunflower oil shipments due to the Russia-Ukraine war push buyers to switch oils, ‌dealers stated.

Soyoil imports in August are likely to rise to 620,000 metric ​tons, almost 46% above the average monthly imports of 424,549 tons ⁠so far in the current marketing year. It began in November, according to four traders directly involved in trade deals. The traders did not wish to be named in line with their companies’ ‌policies.

“Soyoil costs are very competitive. Meanwhile, there are disruptions to sunflower oil shipments. That is making soyoil even more attractive,” said ‌Sandeep Bajoria, chief executive of Sunvin Group, a Mumbai-based vegetable oil brokerage.

In recent months, ‌Russia ⁠and Ukraine have increasingly targeted each other’s port and maritime infrastructure in ⁠and around the Black Sea, disrupting grain and vegetable oil shipments and reducing export capacity.

Around 150,000 tons of sunflower oil originating from the Black Sea and scheduled for shipment in August and September have been delayed as of the conflict, one of the dealers said.

Buyers in southern India ‌typically prefer sunflower oil, but import disruptions are prompting them to switch to ​soyoil, the dealers remarked.

Along with Kandla and JNPT ports on the west coast, Krishnapatnam and Kakinada ports in southern India are now receiving soyoil ⁠shipments, one of the dealers said.

Rate advantage

The premium for soyoil over palm oil has narrowed to around $50 a metric ton from more than $100 in April, said a New Delhi-based ‌dealer, as palm oil costs have risen on concerns that unfavourable weather could hit production and on Indonesia’s move to rise use of palm oil for biofuels.

The narrower premium is making soyoil more attractive to price-sensitive Indian buyers, noted the dealer. This person did not wish to be named in line with his company’s policy.

“Indian imports are probable to exceed 600,000 tons even in September. As the landed cost of palm ‌oil and soyoil is nearly the same for October-December shipments, while sunflower oil is trading at a premium of almost $200 per ton, the dealer said.

India imports ​palm oil mainly from Indonesia, Malaysia and Thailand.

, india has bought almost 1.4 million tons ‌for shipment between September and December,” he said.

Ample soyoil supplies and competitive costs are prompting India to ​step up purchases amid worries that local oilseed production could be affected by an El Nino weather pattern, the dealer said.

Argentina and Brazil usually ⁠account for the bulk of India’s soyoil imports, but India is now sourcing the oil ⁠from destinations such as China, Egypt, Thailand and Turkey for prompt shipments.

India is buying soyoil even for shipments a number of months out.