Visakhapatnam: Sunflower oil prices may harden in the coming months as production in Ukraine, which supplies almost 90 per cent of India’s requirement, is likely to be hit due to unfavourable weather conditions. Also, a dip in production of sunflower oil seeds in Andhra Pradesh and Telangana, a major edible oil refining hub, would add to the pressure on prices, say vegetable oil refiners. The refineries are concentrated around Kakinada in East Godavari district and Krishnapatnam regions because of the ports.

India consumes about 20-22 million tonnes of edible oil, while the domestic production is hardly 5-6 million tonnes, the rest being imported. Of this, the share of sunflower oil is pegged at about two million tonnes, while the local production is less then one lakh tonnes, with Andhra Pradesh being a major producer. “The hot weather conditions in Ukraine could hit production and, as a fall-out, we could see a rally in prices of sunflower oil, which is gaining market on health grounds,” Pradeep Chowdhry, managing director of Gemini Edibles and Fats India, a subsidiary of Singapore-based Sinarmas Group, told this newspaper.

Currently, branded sunflower oil carries a price tag of between Rs 80-Rs 85 a litre at the retail level, while the refiners sell the commodity to retailers at Rs 76-Rs 77. In a recent report, the US Department of Agricu-lture has pointed out that Ukraine’s production of sunflower oil seeds in the new season could be 11.2 million tonnes, which will be lower than the current marketing year by 20 per cent.

However, in the longer run, the edible oil industry feels demand for sunflower oil would grow at 5-10 per cent, much higher than the average five per cent growth of all categories of vegetable oils. This has prompted the major refiners in Andhra Pradesh to expand capacities. GEF India, which has three refineries in Krishnapatnam and one in Kakinada, is planning to either expand the existing refineries or set up a greenfield one. “We are looking at increasing our sunflower oil refining capacity by 350 tonnes per day with an investment of about Rs 100 crore. The project, either a new unit or expansion, will be ready within a year,” Mr Chowdhry said.

Apart from GEF India, which owns the Freedom brand of sunflower oil, the other major players in AP and Telangana are Adani Wilmar, which owns the Fortune brand and Lohiya Industries, both of which are on an expansion mode.