Sunoil's discount to soyoil hits 9-month high, lures buyers
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Sunflower oil's discount to rival soyoil has widened this week to the highest level in more than 9 months as leading exporters Ukraine and Russia were aggressively offering the oil to bring down their stocks, industry officials told Reuters.
The discount could prompt buyers such as India and European countries to increase purchases of sunflower oil in the coming months and reduce buying of soyoil, which could weigh on its prices.
"Sunflower oil sales are picking up since prices are competitive. Instead of the usual premium, now it is available at a discount to soyoil," said Sandeep Bajoria, president of the International Sunflower Oil Association.
Sunoil was trading at a premium over soyoil for most of 2022 after Russia's invasion of Ukraine disrupted supplies from the Black Sea region.
Earlier this week, sunoil's discount to soyoil widened to around $100 per tonne, the highest since February 2022. Sunoil's premium over palm oil has also come down to around $250 per tonne from around $500 a month ago.
Currently, crude sunflower oil is being offered in India at about $1,300 a tonne, including cost, insurance and freight (CIF) for December shipments, compared with $1,320 for crude soybean oil.
Sunflower seeds crushing has gained momentum in Russia, which is offering the oil at competitive prices to bring down inventories, while sellers in Ukraine are trying to take advantage of safe passage to export stuck inventories, said a Singapore-based dealer with a global trading firm.
Stocks from the last season's harvest were also available in Russia and Ukraine, which will put pressure on prices in the next few months, he said.
The Black Sea accounts for 60% of world sunoil output and 76% of exports.
India, the world's biggest importer of sunflower oil, could import 230,000 tonnes in December, up from an estimated 180,000 tonnes in November and 144,934 tonnes in October, said a Mumbai-based dealer with a global trading firm.
"A few months back supplies were limited. Now along with Russia and Ukraine, Turkey and Argentina are also offering the oil," he said.
