India turns to Brazil for soyoil amid Ukraine crisis; exports soar

Brazil's soyoil exports are expected to jump in 2022 driven by demand from India, the world's biggest importer that is facing issues to source vegetable oils from Ukraine, Russia and Indonesia, according to industry sources and government data.

"India is very active on the market," Andre Nassar, president of local oilseed crusher lobby Abiove, told Reuters. "It went to Argentina, the United States, it came to Brazil, they are talking to everyone," Nassar said.

Sunflower oil shipments from the Black sea region to India are stuck, and new purchases have stalled after ports suspended operations following Russia's invasion of Ukraine.

India is feeling "insecure" regarding is traditional trade partners, and is trying to increase use of soyoil amid the conflict in Ukraine and problems with palm oil supplies from Indonesia, Nassar noted.

Soyoil shipments from Brazil could surpass 1.7 million tonnes this year, marking a record high, according to Abiove's projections, which take India's demand into account.

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Brazilian soyoil exports in January totaled 170,300 tonnes, up from just 8,500 tonnes in the same period last year, with India buying nearly 140,000 tonnes - the highest volume in at least 20 years, according to government data.

In January alone, shipments to the Asian nation corresponded to more than 20% of the volumes for the whole of last year to that destination, data showed.

Nassar said as domestic crushing responds to additional demand for soy byproducts, raw soybean exports will tend to fall.

Strong demand for Brazil's vegetable oils comes at a crucial moment for the local crushing industry, which was affected by the government's decision to cut the mandatory blend of biodiesel into diesel, hurting demand.

"Prices of soyoil rose in the international market reflecting demand dynamics," Enilson Nogueira, an analyst with Celeres, said. "Now, the issue with biodiesel will not be as relevant as in previous years."

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