Amid the escalating US-Iran conflict, industries body, on Monday (March 2), said India’s imports of edible sunflower oil and key fertiliser are likely to be disrupted, while exports of agricultural commodities to the Middle East and Europe could also be affected.
Shipping companies have already begun imposing emergency conflict surcharges on cargo moving through the Middle East, with French container giant CMA CGM levying between USD 2,000 and USD 4,000 per container, raising costs for importers.
Exports impacted
“The export to Middle East is on hold now,” Soluble Fertilizer Industry Association(SFIA) President Rajib Chakraborty told PTI.
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Flagging concerns over supplies of sulphur and sulphuric acid, critical inputs for producing DAP and SSP fertilisers ahead of India’s kharif sowing season beginning in June, Chakraborty said, “As the conflict continues, the risk also increases and shipping companies may impose insurance surcharges, making imports costlier.”
Qatar, the UAE and Oman collectively account for 76 per cent of India’s sulphur imports. “The closure of so many ports will lead to congestion and a shortage of containers,” he added.
Effect on the imports
India imports around 16 million tonnes of edible oil annually, of which sunflower oil accounts for roughly 20 per cent, sourced primarily from Russia, Ukraine and Argentina. Shipments could face delays if vessels are forced to reroute away from the Red Sea.
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“So far, there has been no impact. But if the conflict continues, supply of sunflower oil could be disrupted as shipments have to take a detour,” Solvent Extractors’ Association of India (SEA) Executive Director B V Mehta said.
Oil prices
Rising crude oil prices could compound the pressure, given the linkage between energy costs, logistics and global biofuel markets. The Indian Vegetable Oil Producers’ Association (IVPA) warned that any US-Iran escalation sends direct ripple effects through India’s crude and edible oil markets.
“In the near term, we expect volatility to persist both in oils and in dollar/rupee prices, with central focus on these geopolitical tensions,” IVPA said.
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On the export side, India ships 20 per cent of its oilmeal exports to the Middle East and 15 per cent to Europe. Officials said shipments of oilmeal, and agriculture, horticulture, and floriculture products transiting the region were also at risk.
“Crude oil and freight charges have already gone up. We are watching the situation,” Mehta said.
(With agency inputs)
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