Tuesday, 29 November 2022

Edible oil to get expensive Amid Russia - Ukraine war

Edible oil to get expensive after Russia - Ukraine war

Direct effects of the Russian - Ukraine crises would be a further escalation of edible oil prices, especially sunflower oil, traders and solvent manufacturers have been warned. They have also warned of prices moving high rise due to disruption of the supply chain.

The former Soviet republic is India's single-largest import destination of crude sunflower oil.

For the November-October (oil supply year) 2020-21, India imported 18.93 lakh tonnes of crude sunflower oil. Of this, 13.97 lakh tonnes were from Ukraine alone. Argentina (2.24 lakh tonnes) and Russia (2.22 lakh tonnes) are the other significant suppliers, but as the figures show, Ukraine is perhaps the only major supplier to India.

Atul Chaturvedi, president of the Solvent and Extractors Association (SEA)—the apex body of edible oil manufacturers—said prices are expected to go northward.

Chaturvedi said 

"Yes, definitely markets have the serious potential of moving northwards. Sunflower oil comes from Ukraine and Russia and its supply chain will be disturbed. We import almost 2.0 lakh Mts of sunflower oil per month,"

Edible oil to get expensive after Russia Ukraine war 1pixabay image

Read More: India's palm oil imports dip over 29% to 5,53,084 tonnes in January: SEA

This war comes when inflation in edible oil is a significant concern in the domestic markets. The refined sunflower oil prices in the retail market have shot up to Rs 161.94/liter compared to Rs 145.03/liter, according to the Price Monitoring Cell of the Union Ministry of Consumer Affairs. Supply chain disruption can easily see prices increasing significantly.

Chaturvedi said while Argentina can be an alternate supplier, the quality necessary to fulfill domestic demand could not be met from the South American country. Retail food inflation has become a significant problem in the country and has seen the ministry of consumer affairs taking multiple steps to control this.

Another fall out of this war is a sudden escalation of the average traded price of soybean across the wholesale markets in the country. Latur's wholesale market in Maharashtra prices, which were at Rs 6,200 per quintal, has crossed Rs 7,000/quintal since the last two days.

Naresh Goenka, vice president of Soyabean Processors Association of India, said the price rise is a combined effect of the war in Ukraine and reports of the wrong crops in Argentina and Brazil.

He said.

"We feel prices can remain in this range for the next few weeks," 

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