Various countries around the world are engaged in the trade of seed oils. The most prominent one among these is Ukraine. The East European nation is the largest exporter of seed oils in the world, with total exports worth $4.34 billion. On the other hand, India is among the top importers of seed oil, with total imports of around $1.69 billion. Indian importers need to be aware of a number of important factors with regard to importing seed oil from Ukraine. This article will help you in building a better understanding of the process.
Seed oil is one of the most commonly traded commodities around the world. It is categorised under
. Indian imports of seed oil have been on the rise in recent times. This has been driven by two major factors. Firstly, the Indian government announced a customs duty cut in 2019. This helped in boosting the import numbers. At present, nearly 70% of India’s demand is met through imports. This number has also been boosted by the duty cuts announced by India and Malaysia. Secondly, the overall demand for refined oils in the country has been increasing. The growth of the RBD Palmolein industry has meant that the South Asian nation continues to import edible oils extensively. Further, this demand is likely to improve even more in the near future. According to estimates, India’s overall edible oil imports will increase by 7.3% during fiscal 2019–20. This number will be driven by scanty rainfall and low domestic production. At present, the domestic production is growing at a mediocre rate of 3.9%, while the demand is growing in the range of 6–7%.
Since the demand continues to outpace the supply, Indian importers need to plug the gap by looking at alternative supply sources. One such source of supply is Ukraine. Seed oils are the most popular crop among Ukrainian farmers. This is because this product is highly profitable for them. Recent changes in the regulations regarding other crops have meant that the production of seed oils has been boosted even further. Ukraine exports seed oils to more than 160 markets around the world, including the US, China, and India. The Indian importers have already been importing 2.4 MMT of sunflower oil from Ukraine on an annual basis. However, there is a possibility to increase these imports even further. Ukrainian exporters are keen to increase production and improve their market share in India, especially in the case of products like soybean oil.
Importers who want to import seed oils from Ukraine need to be registered with the Indian government. They also need to pay the customs duties on these products. At present, there is a great opportunity to import seed oils from Ukraine, because India is looking to curb imports from countries like Malaysia. Importers looking for a high volume of imports can shift their focus away from Malaysia and concentrate on markets such as Ukraine. India has already begun to implement economic sanctions against Malaysia because of political reasons. Therefore, it becomes even more important for importers to seek alternatives.
Indian importers can ensure that the imports from Ukraine are completed without any hassles by availing the help of international financial institutions. One such institution is the Euro Exim Bank. The bank offers a range of financial instruments that could help traders in importing oil seeds from Ukraine. These instruments include Letters of Credit (LCs) and Bank Guarantees. The bank also provides assistance in terms of regulatory and compliance requirements. You can find more information about the bank, and it’s offerings here.