Russia-Ukraine war likely to raise import price of sunflower oil, yellow peas

Pune: The escalation of the Russia-Ukraine war is likely to inflate India’s import costs for sunflower oil and yellow peas as exports from the two countries through the Black Sea have almost grounded to a halt, with major shipping lines suspending trade on the route.

At the same time, New Delhi‘s basmati rice exports to Tehran could be severely hit as the US has announced economic sanctions on Iran, a key market accounting for about 1 million tonnes, or 17%, of India’s annual basmati exports. Indian traders re-export much of the rice through the UAE, but the availability of vessels to Iran is already limited and could tighten further, potentially bringing the trade to a near standstill.

Sunflower oil exports by Russia and Ukraine have fallen sharply, creating a glut at origin and shortages in the international markets.

“The Black Sea region is a major source of sunflower oil for India and due to the escalation of the Russia Ukraine war, the ports, processing units and the shipping routes have come under drone attacks,” said Sandip Bajoria, CEO, Sunvin group. “This will reduce India’s sunflower oil imports in August to 180,000 tonnes from 300,000 tonnes of monthly imports.”

Deepak Pareek, founder of agri-advisory firm HnyB, said the Black Sea disruption is increasingly “becoming a physical supply-flow problem rather than merely a price issue.”

“Freight constraints, higher insurance costs and uncertain vessel movement are restricting the availability of sunflower oil and yellow peas, forcing buyers toward fewer and more expensive origins,” he said.

“In pulses, this concentration is particularly concerning as dependence shifts heavily toward Canada at a time when its crop is materially smaller,” said Pareek, adding that if the logistics constraints persist, “the impact will be felt not only in higher landed costs but in the actual availability and timing of essential food commodities.”