India is set to import a record volume of soybean oil in August as disruptions to sunflower oil shipments from the Black Sea force refiners to look for alternatives.
Soyoil imports are expected to reach 620,000 metric tons this month, Reuters reported, citing four traders involved in the deals. That would be nearly 46% above the monthly average of 424,549 tons recorded during the current marketing year, which began in November.
The shift comes as Russia-Ukraine hostilities disrupt shipments of sunflower oil, a major import for India. Russia and Ukraine account for most of India's sunflower oil supplies.
Around 150,000 tons of sunflower oil scheduled for August and September shipments have been delayed because of the conflict, one trader reportedly said. Sunflower oil imports could consequently fall to 180,000 tons in August, down 28% from July and the lowest level since February.
Sunflower Oil Disruptions Drive Soyoil Demand
The Black Sea has become an increasingly difficult route for vegetable oil shipments as Russia and Ukraine target each other's port and maritime infrastructure.
The disruption is particularly important for Indian refiners in the south, where sunflower oil is traditionally popular.
With cargoes delayed, buyers are turning to soyoil instead. Shipments are now arriving at southern ports such as Krishnapatnam and Kakinada, in addition to major western ports including Kandla and JNPT.
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Narrower Price Gap Adds To Soyoil's Appeal
Price is giving Indian refiners another reason to switch.
The premium for soyoil over palm oil has fallen to around $50 a ton, from more than $100 in April.
Palm oil has become relatively expensive after concerns over unfavourable weather and Indonesia's decision to increase palm oil use for biofuels. The narrower price gap has made soyoil more competitive for India's price-sensitive buyers.
India's edible oil buying is also rising ahead of the festive season. In July, total edible oil imports climbed to a 10-month high of 1.48 million tons, while soyoil imports jumped 31% to 498,881 tons.
Imports Could Stay Above 600,000 Tons
The buying spree may extend beyond August.
India has already booked nearly 1.4 million tons of soyoil for September-December delivery, traders said, as per Reuters. One dealer expects monthly imports to remain above 600,000 tons in September.
Argentina and Brazil remain India's main soyoil suppliers. But refiners are also sourcing prompt cargoes from China, Egypt, Thailand and Turkey.
Concerns over a possible El Niño effect on India's domestic oilseed production are adding to the urgency.
For now, the combination of Black Sea supply disruptions, strong festive demand and a smaller price premium is reshaping India's edible oil buying strategy. Soyoil, once a competing option, is increasingly becoming the preferred substitute for delayed sunflower oil cargoes.
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