An escalation in the US-Iran military conflict could hamper India’s imports of edible sunflower oil and essential fertilizers, while exports of agricultural commodities to West Asia and Europe could also be affected, industry bodies said on Monday. Shipping companies have begun imposing emergency conflict surcharges on cargo ships transiting through West Asia. In this, French container sector major CMA CGM is imposing surcharge of between $ 2,000 to $ 4,000 per container, due to which the cost of imports is increasing. Rajib Chakraborty, President of Soluble Fertilizer Industry Association (SFIA), said, exports to West Asia are currently at a standstill. The risks will increase as the war continues and shipping companies may impose insurance surcharges, making imports more expensive.
Rajib Chakraborty expressed concern
Chakraborty expressed concern over the supply of material required to make DAP and SSP fertilizers ahead of the domestic kharif sowing season starting in June. Also said, closure of so many ports will lead to traffic jams and shortage of containers. Qatar, UAE and Oman together account for 76 per cent of India’s sulfur imports. India imports 16 million tonnes of edible oil every year, of which sunflower oil accounts for about 20 per cent, mainly from Russia, Ukraine and Argentina.
If there is interruption in supply, another route will have to be adopted for export.
There has been no impact so far, said BV Mehta, executive director of the Solvent Extractors Association of India (SEA). However, if the war continues, the supply of sunflower oil may be disrupted as export consignments will have to take another route. Rising crude oil prices could add pressure given the relationship between energy costs, logistics and the global biofuels market. Indian Vegetable Oil Producers Association (IVPA) has warned that any kind of tension between America and Iran will have a direct impact on India’s crude oil and edible oil markets.