Ukraine war's sunflower oil shock fades as prices crash, Indian imports surge

The price of sunflower oil tells the story of how a distant war reshapes what people cook with at home. In January 2022, before Russia's invasion of Ukraine, Indian importers were paying around $1,475 per tonne for crude sunflower oil. Three months later, by April, that same oil cost $2,155 per tonne—a jump of nearly 46 percent in just a few months. The reason was simple and brutal: Ukraine and Russia together produced nearly 58 percent of the world's sunflower seeds, and the war had choked off their ability to ship anything through the Black Sea ports.

Edible oils as a category had already been on a wild ride. The UN Food and Agriculture Organization tracks global vegetable oil prices on an index where 100 represents the 2014-2016 baseline. In May 2020, at the height of pandemic lockdowns, that index had fallen to 77.8. By March 2022, just after the invasion, it had soared to an all-time high of 251.8. Within that volatile landscape, sunflower was the most extreme case—the oil that swung hardest and fastest because so much of the world's supply came from two countries now at war.

But markets have a way of adjusting. On July 22, 2022, Russia and Ukraine signed the Black Sea Grain Initiative, an agreement that created a safe corridor for ships carrying grain and other foodstuffs out of three designated Ukrainian ports. The deal was fragile and temporary, but it worked. Sunflower oil that had been trapped in Ukrainian warehouses began moving again. International prices fell below what they had been before the war even started. By May 2023, crude sunflower oil was landing in India at around $950 per tonne—cheaper than soybean oil at $990.

India consumes between 23.5 and 24 million tonnes of cooking oil every year. About 13.5 to 14 million tonnes of that comes from imports; the rest is produced domestically. Sunflower ranks fourth in consumption, behind mustard, soybean, and palm oil. But unlike mustard and soybean, which India grows in significant quantities, sunflower and palm are almost entirely imported—domestic production of sunflower amounts to barely 50,000 tonnes. This means Indian consumers live or die by global prices. When sunflower oil cost $2,155 per tonne, refined sunflower oil on store shelves in Chennai and Bengaluru sold for Rs 190 to 200 per kilogram. When the price crashed to $950 per tonne, the same oil retailed for Rs 119 to 120 per kilogram—a difference of nearly 40 percent.

During the price spike, Indian households and businesses had switched. Families that normally cooked with sunflower moved to cheaper soybean or local oils. Restaurants, tiffin rooms, and institutional canteens that had relied on sunflower switched to palm oil. Pradeep Kumar Chowdhry, managing director of Gemini Edibles & Fats India Ltd., which sells the Freedom brand of refined sunflower oil, described the shift plainly: "When prices went through the roof, many households replaced sunflower with relatively cheap soyabean or even local oils. Institutional consumers such as restaurants, tiffin rooms and canteens that were using sunflower, likewise, switched to palm oil. But with import flows and price parity being restored, they are all coming back."

The numbers bear this out. Before the war, India imported about 0.2 million tonnes of sunflower oil each month. That fell to 0.15 to 0.16 million tonnes during the conflict. In the last four to five months of 2023, as prices normalized, imports rebounded to 0.25 million tonnes monthly. India's total edible oil imports for the November 2022 to April 2023 period reached 8 million tonnes, a 22.3 percent increase over the same months the previous year. At that rate, the full oil year running November to October could exceed 14.9 million tonnes—a record.

The geography of sunflower consumption in India is heavily skewed. Roughly 70 percent of the country's sunflower oil is consumed in the South, with Maharashtra accounting for 10 to 15 percent and other states making up the remainder. This pattern reflects decades of habit and local agricultural tradition. Sunflower was traditionally grown in Karnataka, Telangana, and Maharashtra, so consumers in those regions became familiar with the oil. Meanwhile, soybean had been planted in Madhya Pradesh and Rajasthan, shaping preferences there. Domestic sunflower production has collapsed over the past decade, falling to nearly nothing, while soybean cultivation has expanded substantially.

The supply picture has shifted too. Ukraine's share of India's sunflower oil imports plummeted from 1.48 million tonnes in 2021-22 to just 0.43 million tonnes in 2022-23. Russia's share nearly doubled, from 0.34 to 0.57 million tonnes. Argentina, Romania, and Bulgaria all increased their exports to India, filling the gap left by Ukraine's disruption. The market is adjusting, diversifying, learning to live without dependence on a single corridor. And as prices fall and supply stabilizes, Indian consumers are returning to the oils they prefer—a quiet reminder that even global commodity markets, when given the chance, find their way back to normal.