Sunflower oil consumption expected to fall by 4L tonne

By Vijay C Roy

Sunflower oil consumption in the country is likely to go down by 3-4 lakh tonne in the current fiscal year with consumer shifting their preference to soybean oil amid a price correction on back of a healthy soy harvest.

It is worth noting that the Indian edible oil industry is dominated by palm oil with a share of about 40 per cent in volumes followed by soybean oil and sunflower oil with a 20 per cent and 15 per cent share, respectively. The demand for sunflower oil depends partly on the price movement of its substitutes such as palm oil and soybean oil.

“The price of soybean oil is likely to correct by $100 per tonne this fiscal on account of bumper harvest. The resultant shift in consumption towards soybean oil will lower sunflower oil volume to 28-29 lakh tonne in 2024-25 from about 32 lakh tonne in 2023-2024,” said Jayashree Nandakumar, Director, Crisil Ratings.

India houses significant sunflower oil refining capacities and imports over 95 per cent of its sunflower crude requirement. According to Crisil, despite declining volume, the crude prices are expected to remain firm this fiscal as shipping and freight costs continue to be high amid the Red Sea crisis. This, coupled with domestic demand, will result in sustenance of refined sunflower oil prices at current levels. Given lower volume and firm prices, the industry is expected to see a negative growth of 6-8% in the current financial year.

Currently, India’s total consumption of edible oils is pegged between 225-230 lakh tonne, of which domestic production stands at about 100 lakh tonne. The gap between demand and supply is about 55 per cent and is met through imports.

This article has been republished from The Tribune.