Wheat, Sunflower Oil Prices to Soar Over Ukraine-Russia War

Wheat, Sunflower Oil Prices to Soar Over Ukraine-Russia War - Sakshi Post

Wheat and sunflower oil prices are expected to skyrocket as a result of the Ukraine-Russia conflict.

Domestic Wheat and Sunflower Oil Prices: The ongoing conflicts between Russia and Ukraine are expected to influence domestic wheat and sunflower oil prices.

Both countries produce considerable amounts of wheat, and Ukraine is one of the world's largest exporters of sunflower seeds.

Analysts say that while India is self-sufficient in wheat, it does import some high-quality grain.

Also Read: Impact of Russia-Ukraine Conflict on the Global Economy

Furthermore, the drop in Russian and Ukrainian wheat prices on the international market will provide an appealing opportunity for Indian exporters, raising domestic prices significantly.

Domestic wheat prices have risen by Rs 300 per quintal to Rs 2,300 per quintal recently.

This pattern is expected to persist until a new supply arrives in April.

India, on the other hand, is highly reliant on Ukrainian and Russian supplies of sunflower seeds.

Imports are a less expensive choice because India's sunflower seed production has been hovering around 60,000 tonnes for the past few years.

In this instance, India can meet its demand for crude palm oil by using CPO. CPO prices, on the other hand, have recently surged.

Inflation will be pushed up by these agro-commodity price trends, which are still in their early stages.

In January, India's major inflation indicator, the Consumer Price Index (CPI), which measures retail inflation, crossed the Reserve Bank of India's target range.

Furthermore, the Consumer Food Price Index, which tracks food retail price increases, increased to 5.43 per cent last month from 4.05 per cent in December 2021.

The trend is significant since the retail inflation rate has breached the Reserve Bank of India's target range.

The CPI target range for the central bank is 2% to 6%.

"Domestic wheat prices have increased by Rs 300 per quintal. The ongoing conflict between Russia and Ukraine will add pressure on the domestic prices," according to Anuj Gupta, VP, Research at IIFL Securities.

"We expect the prices to remain elevated until fresh supplies come up."

CapitalVia Global Research's Lead of Commodities and Currencies, Kshitij Purohit, said: "Both wheat and sunflower seeds’ domestic prices are expected to see a rise due to the ongoing war between Russia and Ukraine. Wheat prices have risen by around Rs 300 per quintal. There has been an increase in the price of sunflower oil as well."

"The rise in sunflower seeds’ prices have also pushed the CPO prices higher."

Hetal Gandhi, Director of Crisil Research, said: "With the ongoing geo-political issues in these countries (Russia and Ukraine), India could expand its (wheat) exports to countries like Bangladesh, Egypt, Indonesia, and African nations… We expect wheat prices to inch up over the next 3–6 months."

"Over the next 3-6 months due to lower import of sunflower oil, Indian consumers may shift to soy and palm oil and hence, prices are expected to inch up for sunflower oil in the coming six months. How the political tensions pan out will determine prices over the long term."

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