Intense Competition Among Top Suppliers
Indian importers are capitalizing on the intense competition between Russia and Ukraine, the two top suppliers of sunflower oil, to secure significant quantities at competitive prices. This price drop has made sunflower oil cheaper than both soybean oil and palm oil, prompting Indian importers to contract a record purchase of about 0.5 million tonnes of sunflower oil for June delivery.
Old Stock Clearance Ahead of New Crop Harvest
India, the world’s largest importer of vegetable oils, offers an attractive market for Black Sea region suppliers to offload their old stock. With the new sunflower oil crop set to be harvested in Russia, Ukraine, and Romania in the coming weeks, production will increase, leading millers and processors to reduce old stock prices to make room for the new supply.
According to a leading importer, the price of sunflower oil has fallen below that of soybean and palm oil, driving significant purchases by Indian buyers. The demand for sunflower oil is particularly strong in India’s southern states, where consumption is rising rapidly.
Implications for Soybean and Palm Oil Markets
A few weeks ago, crude sunflower oil destined for Indian ports in June was priced at $0,94 per kg, while crude soybean oil was $1,02 per kg, and crude palm oil was $0,95 per kg. Typically, sunflower oil prices are more than $0,11 per kg higher than soybean and palm oil, but the current situation has reversed this trend.
India imports substantial quantities of sunflower oil from Russia, Ukraine, Argentina, and Romania. The competition among these suppliers to capture the Indian market has intensified, leading to significant price reductions. Last season, India imported an average of 0.25 million tonnes of sunflower oil per month, but the current competitive pricing and increased demand could see this figure rise even further.
The aggressive pricing strategies of Russia and Ukraine have led to a significant reduction in sunflower oil prices, making it more attractive than soybean and palm oil for Indian importers. This competitive landscape is driving record purchases and altering traditional price dynamics, benefiting Indian consumers and reshaping the market.