Cooking Oil May Rise Due to Ongoing Russia-Ukraine War, Here's Why

The sunflower oil industry of India is concerned that the escalation of hostilities between Russia and Ukraine may cause the import of the popular edible oil to be delayed, raising the price.

Cooking oil prices are expected to rise in India as a result of the ongoing conflict between Russia and Ukraine, the world's two largest producers and exporters of sunflower oil. A battle between the two countries would cause a supply shortage in the market, pushing prices even higher. India would be hurt the worst since Russia and Ukraine account for 90% of the country's sunflower oil imports.

The ongoing European conflict between Russia and Ukraine will have an influence not just on global crude prices, but also on what Indians would pay for gasoline, diesel, and LPG cylinders once the Uttar Pradesh elections are over on March 7. It will also have an impact on the price of cooking oil, which will be more immediate.

One of the main reason of the rise is becasue about 90% of India's sunflower oil needs are met by Ukraine and Russia combined. The Russian invasion of Ukraine could impact the sunflower industry of India. Prices might skyrocket if things go wrong, according to industry watchers.

Sunflower oil is consumed in India in the amount of 2.5 million tonnes (MT) per year. After palm (8-8.5 MT), soybean (4.5 MT), and mustard/rapeseed, it is the fourth most consumed edible oil (3 MT). However, India produces just around 50,000 tonnes of sunflower oil and imports the remainder, the most of which comes from Ukraine and Russia.

Additionally, in 2021, unfavorable weather conditions in key oil-exporting nations such as Malaysia, Indonesia, Ukraine, Argentina, and Russia, as well as a labor shortage owing to the pandemic, had an impact on edible oil output.

Last year, soyabean oil prices surged due to dry weather in Argentina's top producer and strong demand from India and China. Due to drought-like circumstances in Russia and Ukraine, sunflower oil prices have risen.