India's sunflower oil imports dropped by 51% year-on-year to 145,000 tonnes in February, and fell to 904,000 tonnes during the first four months of the 2025-26 oil year, down from 1.12 million tonnes in the same period last year. This decline is attributed to ongoing conflicts in the Black Sea region and West Asia, which have disrupted shipping routes, particularly through the Red Sea and Suez Canal, leading to increased freight costs and higher prices. Russia and Ukraine together typically account for 70-90% of India's sunflower oil imports.
The average import price of crude sunflower oil surged by 17% to $1,420 per tonne in February, compared to $1,216 a year earlier. This price hike, coupled with a 4.2% depreciation of the Indian rupee against the US dollar, has significantly increased the cost burden for Indian importers and refiners. Industry experts note concerns that further escalation of the Middle East conflict could force shipments to be diverted around Africa, adding over 10 days to transit times and increasing freight costs by more than $20 per tonne.
To mitigate its dependence on Black Sea supplies, India is actively seeking alternative sourcing options. The country is in discussions with Mercosur nations—Argentina, Brazil, Paraguay, and Uruguay—for potential long-term contracts for both soybean and sunflower oil. Despite the fall in sunflower oil imports, India's overall vegetable oil imports in February rose 6% year-on-year to 5.324 million tonnes, driven by increases in palm oil and soybean oil imports. Palm oil imports stood at 847,000 tonnes, while soybean oil imports were 299,000 tonnes.
The price disparity between sunflower oil and other edible oils has led Indian consumers, particularly in the southern region, to switch to cheaper alternatives like palm oil. Crude sunflower oil from the Black Sea region is currently offered at around $1,420 per metric tonne, significantly higher than crude palm oil at approximately $1,165 per tonne and crude soybean oil at roughly $1,255 per tonne. This trend is expected to continue, with sunflower oil imports projected to fall to around 2.65 million tonnes in the marketing year ending October, the lowest level since the 2021/22 season.
The ongoing disruptions also pose risks to India's oilmeal exports, as Southeast Asia and the Middle East account for nearly 20% of these exports. Furthermore, rising crude oil prices have stimulated interest among biofuel producers in palm oil-based biodiesel, potentially boosting near-term demand for palm oil in Southeast Asia and affecting global edible oil market dynamics.
