India is poised to experience a decline in sunflower oil imports in the coming months due to a surge in prices propelled by increased freight rates. As the world's largest sunflower oil buyer, India typically sources a significant portion of its imports from the Black Sea region via the Red Sea. Recent Houthi attacks have led shipping companies to reroute trade around Africa, resulting in higher time and costs.
Elevated freight rates have caused the landed cost of sunflower oil to surpass that of soyoil in India for the first time in nearly a year. The CEO of a vegetable oil brokerage noted that sunoil imports had been robust in recent months due to price advantages over soyoil, but rising freight costs have eroded this advantage.
Currently, crude sunflower oil imports are priced at around $943 per tonne, including cost, insurance, and freight (CIF), for February delivery in India. In contrast, crude soyoil is offered at approximately $935, and crude palm oil at $933. Two months ago, sunflower oil traded at a $120 per ton discount to soyoil, prompting an increase in sunoil imports.
In December, India's sunoil imports more than doubled from the previous month to 260,850 tons. However, the trend is expected to reverse, with sunflower oil imports potentially falling to 225,000 tons in January as soyoil imports are anticipated to rise above 230,000 tons. If the current price trend persists, sunflower oil imports could decrease to around 200,000 tons in the coming months. Competitive prices from a particular region have also influenced the market, diverting India's preference towards soyoil from that region over sunoil from the Black Sea region.
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India