Food oil market is expected to stabilize only after global supply increases

22-Jun-2024 12:55 PM

Mumbai. For the last few weeks, there has been a general uptrend in the prices of food oils in the global market because of supply constraints from major exporting countries.

The off-season for supply of sunflower and its oil is going on in the Black Sea region countries - Russia, Ukraine and Romania.

The arrival of new sunflower goods may start from July-August and only after that the supply situation will improve.

Anyway, the import of sunflower oil from Ukraine to India is now decreasing significantly and this shortage is being met by Russia and Romania. Sunflower oil is also imported from Argentina.

There was a disruption in the supply of soybean oil in Latin America. There, the crushing of soybean was affected due to the strike of workers in Argentina and the pace of its production and export slowed down.

Torrential rains and severe floods in Brazil's southern state Rio Grande do Sul not only caused huge damage to the soybean crop but also caused great difficulty in transporting soybean stock to crushing units due to the collapse of the transport system.

In comparison, the supply and availability of palm oil in Indonesia, Malaysia and Thailand in South-East Asia was better.

In India, a good increase was seen in the import of edible oils during the month of May because its contract and shipment was already done, but there may be some impact on imports in the current month.

Meanwhile, the Central Government has increased the minimum support price of oilseed crops like groundnut, soybean, sunflower oil and nigerseed for the current Kharif season. It may take some time for the edible oil market to stabilize.