India’s import bill for edible oils is slated to jump by $2 billion, following the sharp rise in prices after the Russian attack on Ukraine, Financial Express reported.
Every year, India imports 130 lakh tonnes of oil. According to industry players, the regular cost of this would have been $18 billion, but because of the invasion, the import bill has increased by $20 billion.
"The import bill has gone up by roughly $ 2 billion annually as a result of the invasion and overall pricing table going up," Sandeep Bajoria, CEO of Sunvin Group, a vegetable oil brokerage and consultancy firm, told FE.
Sunflower prices have risen from $1,500 per tonne to $2,050 per tonne as a result of supply shortages caused by the Ukraine crisis. Soya oil is now trading at $1,800 per tonne, up from $1,500 per tonne before the war, while palm oil is up from $1,400 to $1,700 per tonne.
India has contracted 45,000 tonne of sunflower oil from Russia and another 20,000 tonnes of sunflower from Argentina for the current month at $2100 per tonne.
Prices rose to $2,200 per tonne immediately after the attack, but have since fallen as Russia and Argentina increased supplies.
Around 90% of India’s annual crude sunflower oil requirement of 22-23 lakh tonne comes from Ukraine to the tune of 70% and 20% from Russia and the remaining 10% from Argentina.
“The country used to import 2 lakh tonnes of sunflower oil each month, but now we will receive 1 lakh tonne, which will meet the country's fundamental demand. Other users will switch to soya or palm oil, or to locally produced oils such as rice brand and groundnut oil”, he added.
Refined sunflower oil accounts for 10% of India's yearly edible oil consumption of 230-240 lakh tonne (all varieties). Nearly 60 percent of the country's edible oil is imported.
The greatest volume of import for the current oil year, beginning in November 2021, has been palm oil. Palm oil accounts for around 80 lakh tonne of the 130 lakh tonne produced annually, soy oil for 35 lakh tonne, and sunflower oil for approximately 15 lakh tonne.
According to the Solvent Extractors Association of India (SEA), India had imported around 10 lakh tonnes of edible oil in March 2022.