Sunflower oil demand in India may drop 10% amid supply disruptions

Demand for refined sunflower oil in India is expected to decline by around 10% in the current fiscal year due to supply chain disruptions and rising prices, according to a report by Crisil Ratings. The drop in volumes is driven by two main factors: geopolitical instability in West Asia and higher logistics costs, which are pushing consumers toward cheaper alternatives such as rice bran and soybean oils.

Despite the anticipated decline in volumes, revenues for sunflower oil refiners are expected to remain stable, as higher prices are likely to offset lower demand. India’s sunflower oil industry relies heavily on imports of crude oil, mainly from Ukraine and Russia, making it vulnerable to global disruptions.

Geopolitical tensions have also led to longer shipping routes, with vessels forced to detour around the Cape of Good Hope, increasing transit times and costs. Additionally, insurance premiums for shipping through high-risk regions have risen, further raising the landed cost of crude sunflower oil for Indian refiners.

Retail prices for refined sunflower oil have risen to around 170–175 rupees per litre compared with roughly 150 rupees in January 2026, encouraging some consumers to shift partially to cheaper alternatives. Sunflower oil accounts for approximately 12–14% of India’s total edible oil consumption, which stands at 25–26 million tonnes annually.

Despite the volume decline, profitability for refiners is expected to remain stable. They are able to pass on price increases to consumers with a short lag of 10–15 days and employ effective hedging strategies to manage price risks. Lower inventory levels may also temporarily free up working capital, supporting cash flows for domestic refiners.

Tags: sunflower oil, India