Cooking oil prices rise in February over Russia-Ukraine conflict

Ukraine and Russia are among the major suppliers of sunflower oil, meeting a significant portion of the global demand for edible oil.

India consumes an estimated 2.5-3 million tonnes of sunflower oil per year. Of this, about 70% comes from Ukraine. Ukraine and Russia together accounted for about 13% of all edible oil imports from India in 2021, supplying 1.6 million tonnes, according to a Reuters report.

in India, prices Packaged sunflower oil rose 4% sequentially in February, while mustard oil rose 8.7%. Soybean oil prices declined marginally by 0.4%, while vegetable oil rose 2.7%. Groundnut oil rose 1%. Palm oil, which is widely consumed by Indian households, saw prices fall by 12.9% after a period of high prices. Although palm oil prices are still up 22.9% compared to February 2020.

Bijom tracks the sales of packaged consumer goods across 7.5 million retail outlets in India.

Edible oil prices in India saw some correction between the September and December quarters. In January, Bizom data indicated a 10-30% drop in prices from the peak of the previous two years.

However, conflict in Ukraine in late February again put pressure on essential commodities, including cooking oil.

Bijom’s chief marketing officer Akshay D’Souza said while edible oil prices had seen some stability in the past two quarters due to government-imposed restrictions, the Russo-Ukraine war reversed that trend.

“Sunflower oil, which is a major import from Ukraine, has seen an immediate rise in prices. The escalation of the war and sanctions on Russia could further strain prices,” D’Souza said.

Bijom is yet to release the figures for March.

Edible oil prices have risen 15-20% year-on-year, said Kunal Vora, head of India Equity Research at BNP Paribas India, in an Indian Consumer Price Tracker report released on March 17. “In our recent investigations, we have heard that prices are going to rise again due to the recent increase in edible oil prices,” Vora said. Prices of most edible oils are still pre-covid levels. Compared to the pre-covid period or for example, the price of sunflower oil has increased by 50% in February 2020, vegetable oil has increased by 58%, while soybean oil has increased by almost 20% .

Marico declined to comment on a query on its edible oil brand Saffola.

A company spokesperson for Mother Dairy said that due to the dynamic situation in the domestic edible oil industry, various edible oils are being traded at a higher price point. This has affected consumer demand. However, it expects improvement in the supply of mustard, palm and soybean oil. The dairy cooperative sells cooking oils of groundnut, mustard and sunflower under the brand Dhara.

“This upward movement is mainly due to the fact that consumers of sunflower oil have started shifting to other types of oils like groundnut, rice-bran, soybean etc. Now, oils like mustard, soybean and palm. With the improvement in supply, prices of various types of oils except sunflower oil have started declining trend. Hence, we expect consumer prices to come down in the coming days.”