The situation in the Red Sea may force India to increase supplies of vegetable oil from South America

Published Jan 24, 2024

Tridge summary

Sunflower oil prices in India have surpassed soybean oil prices for the first time in a year due to rising freight costs, as reported by Sunvin Group. The increased delivery time and cost, resulting from ships being rerouted from Europe to Asia, are prompting India to consider cheaper oil purchases from South America. If this price trend persists, India's sunflower oil imports could decrease while soybean oil imports could rise. Despite a 18% increase in the export of high-oleic sunflower oil by Ukraine over the first four months of the 2023/24 marketing year, reaching 120 thousand tons, it remains below pre-war levels.

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Original content

India, which is the world's main importer of sunflower oil, receives most of it from the Black Sea region via the Red Sea. But due to the current situation, shipowners are sending ships from Europe to Asia, bypassing Africa, which increases delivery time and cost. Prices for Argentine sunflower oil are now lower than for Black Sea oil, so India can reorient itself to purchasing oil from South America. Sunflower oil prices in India have surpassed soybean oil prices for the first time in a year, amid rising freight costs, according to broker Sunvin Group. “In recent months, the import of sunflower oil has been stable due to a better price for it than for soybean oil, however, after the rise in freight prices, this advantage has been lost,” company experts note. Currently, imported unrefined sunflower oil in India is offered at $943/t CIF (cost, insurance and freight) for February delivery, while crude soybean oil is offered at $935/t and crude palm oil at $933/t. Two months ago, ...

Source: Oilworld