Edible oil prices may go through the roof as Ukraine crisis worsens
The ongoing struggle between Russia and Ukraine is likely to impact edible oil prices in India because Russia is world’s largest producer of sunflower oil while Ukraine is its leading exporter.
Moscow’s invasion of Kyiv has already resulted in oil shortage across the world, thus increasing prices in the international market. India would suffer the most because 90 per cent of its sunflower oil imports are from these two countries.
India imported about 19 lakh tonnes of crude sunflower oil between November 2020 and October 2021, of which 13.97 lakh tonnes was from Ukraine. Sunflower oil accounts for 14 per cent of all edible oil imports — the fourth most consumed edible oil in the country after palm, soyabean and mustard. About 85 percent of soybean oil in India comes from Argentina and Brazil. India’s palm oil requirement is fulfilled by Indonesia and Malaysia.
The price of sunflower oil has already touched Rs 161 and that of soya oil, mustard oil, groundnut oil, vanaspati, sunflower oil and palm oil have risen by almost 50%. The retail price of mustard oil has gone up to Rs 191 per kg in February this year, up from Rs 185 per kg a month ago. The prices of soya oil and sunflower oil too have increased more than 18% and 11% since respectively. Mustard and palm oil prices too jumped 30% and 15.2% in a year.
The price rise has been steep in the last two years — Groundnut oil has increased from Rs 120 per litre in March 2020 to 179.79 as of Feb 24, 2021, a 39.8 per cent increase.
Interestingly, India consumes around 2.5 million tonnes (mt) of sunflower oil a year but it only produces 50,000 tonnes of sunflower oil and imports the rest.
In order to control the prices, the government slashed import duty on edible oil several times in 2021.