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Sunflower oil traders in the Black Sea have been looking for new export markets as demand from Asian falters due to high stocks, national holidays and increased competition, AgriCensus reported.

China – one of the leading importers – had reported high stocks of sunflower oil while India had increased sunflower oil imports from Argentina in a bid to minimise supply disruption risks associated with Black Sea sunflower oil shipments, the 9 February report said.

In addition to facing increased maritime risk in the Black Sea, exporters in both Russia and Ukraine – the two largest sunflower oil producers and exporters in the world – now faced disruption from Houthi attacks on vessels in the Red Sea, AgriCensus wrote.

The disruption had led to increased costs in key transit routes connecting traders to major export markets and had made Black Sea sunflower oil uncompetitive on price and with complicated logistics, the report said.

India imported 119,432 tonnes of Argentine sunflower oil from 1 November 2023 to 31 January 2024 – more than 70% higher than in the same period of the previous year, according to the Solvent Extractors’ Association of India (SEA).

Indian buyers were opting for Argentine sunflower oil due to concerns over logistics and increased costs, risks in the Black Sea and Red Sea, and the South American product’s lower cost, the report said.

On average, the cost of freight from Argentina to India is 20% lower than freight from the Black Sea region and, at the time of the report, was US$83-90 CIF India compared with US$100-US$120 CIF India from the Black Sea, according to estimates from trade sources.

Argentine sunflower oil was trading at US$910/tonne CIF India for delivery in February and US$900/tonne for delivery in March-April, while sunflower oil from the Black Sea region was trading at US$920-US$940/tonne CIF India, depending on the month supplied, AgriCensus wrote.

Meanwhile, soyabean oil – which Indian importers would turn to as an alternative product when prices allowed – was becoming more popular, the report said.

According to AgriCensus monitoring data, soyabean oil for delivery in April was trading at US$920/tonne CNF India, while sunflower oil for delivery in February-March was trading at US$940/tonne CIF India.

At the time of the report, Chinese buyers had not been active for more than a month, as sunflower oil stocks in the country – although declining week-on-week – remained high compared to the previous season and were estimated by Chinese sources at 340,000 tonnes at the end of January.