Soyabean oil, too, is turning expensive, as dry weather in the US has impacted soyabean production in the country, a top producer and exporter of the beans.
Shipments of sunflower oil to India have stopped after Russia on July 17 said it was pulling out of the year-old deal that allowed shipments of grains and other foodstuffs to move past the Russian naval blockade in the Black Sea. To make matters worse, over the next two days, Russia bombed the Ukrainian grain port of Odesa, reportedly destroying more than 60,000 tonnes of grain.
India imports sunflower and soyabean oils to meet domestic demand. Since the suspension of the deal, sunflower oil prices have risen by almost 8%.
“Prices of both sunflower and soyabean oils have started moving up,” said Sandeep Bajoria, Bajoria, CEO of Sunvin Group, a vegetable oil brokerage and consultancy firm. “If Russia does not extend the grain deal, then prices of sunflower oil go up further. On the other hand, dry weather conditions in the US have driven up the prices of soyabean oil by 5% in the last week.”
In the current oil year, which began in October 2022 and will end in November 2023, demand for sunflower oil is expected to be 3 million tonnes compared with 2.3 million tonnes last year, said Bajoria, as oil consumption has increased after cooking oil prices fell from last year. India annually imports 14.5 -15 million tonnes of oil.
Russia’s move has also put the consumer staple companies in a spot. “Even though the prices of imported sunflower oil have increased from $960 per tonne to $1030 per tonne in the last three to four days, we cannot increase prices at the retail end immediately,” said Pradeep Chowdhry, managing director of Gemini Edibles & Fats.
Global wheat prices have shot up after Russia pulled out of the Black Sea grain deal. On Wednesday, wheat prices on the European stock exchange soared by nearly 9% from the previous day to $284 per tonne.US wheat futures saw a jump of 8.5%—the highest daily rise since the war broke out in February last year.
“Prices of wheat are expected to go up by 15% in the next three to four months,” said Anjani Aggarwal, past president of the Roller Flour Millers Association of India. “The suspension of the grain deal will further give a fillip to the price hike.”
Meanwhile, the dry weather condition in the US is also a matter of worry for the Indian edible oil industry. According to the US Department of Agriculture’s June 30 acreage report, soybean acreage is down by 4.6% compared with last year to 83.5 million acres.
