Shipments of more than 350,000 tons of cooking oil to India have been jeopardized by a raging war between Russia and Ukraine, with logistics and cargoes stranded at several ports. India is the world’s largest consumer of sunflower oil, importing up to 60% of its needs. It is also the world’s largest buyer of palm and soybean oil.
According to a Reuters story citing Sandeep Bajoria, head of the International Sunflower Oil Association, traders in the country had signed contracts to import 550,000 tons of sunflower oil from Ukraine and Russia for deliveries in February and March.
While 1.80,000 tons of cooking oil was able to leave the ports, Bajoria stated the status of the remaining cargo was unknown.
Nearly 80% of the world’s sunflower oil supplies come from Ukraine and Russia.
If the supply is affected, the likelihood of a price increase of frying oil in the country increases. Despite tax relief and mandatory inventory restrictions, food costs for consumers rose at the fastest pace in 14 months in January, hurting household finances for many. Prices have remained high on the back of a surge in global edible oil futures.
Until October last year, India bought 1.89 million tons of crude cooking oil, with Ukraine supplying 74% of it and Argentina and Russia each accounting for about 12% of imports.
Due to supply issues, global prices of vegetable oils, used in everything from baking cookies to baking chips to producing shampoo, have more than doubled in two years, with palm and soybean oil going to the top this week. record highs have risen.
With the situation between the two countries becoming more complicated by the day, Western governments have warned that if fighting continues, Kiev could collapse.
Several cooking oil companies in Ukraine have ceased operations. Bunge Ltd. has ceased operations in two oilseed processing plants, the joint venture of Wilmar International Ltd. has discontinued its vegetable oil business in the country and Archer-Daniels-Midland Co. has closed an oilseed crushing plant in Chornomorsk.
“There will be a shortage of sunflower oil around the world and prices will rise,” Bajoria told Reuters. He went on to say that Indian importers will wait about a week before switching to palm and soybean oil to replenish domestic supplies.
The ongoing conflict between Moscow and Kiev is one of Europe’s worst security crises since World War II. According to media reports, the Ukrainian delegation has agreed to meet with the Russian delegation for negotiations along the Ukrainian-Belarusian border.
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