Sunflower oil's premium over rival soyoil has narrowed and the oil has started gaining lost market share on rising supplies from top exporter Ukraine after a UN-brokered corridor through the Black Sea came into force from August.
Sunflower oil prices have dropped by nearly half from their record high hit in April.
Ukraine, a major agricultural producer, was left unable to export through the Black Sea after Russia's invasion on 24 February until the agreement of the grain deal, which promises safe passage for ships carrying crops.
Stuck Supplies
Ukrainian suppliers have been trying to ship stuck sunoil supplies as quickly as possible.
"A large amount of sun seeds are yet to be crushed from the previous season's crop," said a Mumbai-based dealer with a global trading firm.
Ukraine's sunflower oil exports slumped when Russia blockaded its Black Sea ports after the invasion, forcing the biggest buyer India to source more from Argentina and Russia. Ukraine's absence lifted the oil's premium over rival soyoil and forced buyers to curtail buying.
India has raised sunflower oil buying from Ukraine in the past few weeks as sunflower oil's premium over soy oil has narrowed, said Sandeep Bajoria, the chief executive of vegetable oil brokerage and consultancy Sunvin Group.
Crude Sunflower Oil
Crude sunflower oil is offered at $1,250 a tonne including cost, insurance and freight (CIF) to India for October shipments, compared with $1,145 for crude soy oil, dealers said. Before the resumption in shipments from Ukraine, sunflower oil was holding a premium of more than $300 per tonne over soy oil.
India's sunflower oil imports in September could rise to 200,000 tonnes from 135,308 tonnes in August, said a New-Delhi-based dealer with a global trading firm.
"Sunoil and sun seed stocks are much higher than normal in Ukraine and Russia. They have been now competing with each to clear inventories. It will weigh on sunoil prices and keep them around soyoil," the dealer said.
News by Reuters, edited by Donna Ahern, Checkout. For more supply chain stories, click here. Click subscribe to sign up for the Checkout print edition.
