In order to keep rising edible oil prices in check, India is looking to sign long-term contracts with Mercosur countries to import crude sunflower oil. Russia’s invasion of Ukraine has disrupted imports from Europe’s second-largest country, causing edible oil prices to skyrocket.
According to the report, which cited sources familiar with the development, India may need to reduce import duties on Mercosur-sourced sunflower oil and relax testing requirements under the grouping’s existing preferential tariff agreement (PTA).
Mercosur, a Latin American trading bloc, is made up of four sovereign member countries: Argentina, Brazil, Paraguay, and Uruguay. India and Mercosur signed a PTA in 2004.
“We’ve had two or three rounds of talks with Mercosur countries.” We need to sign long-term contracts because meeting demand in agriculture necessitates careful planning. Mercosur has previously targeted only China for sunflower oil exports because India has export restrictions. Tariff quotas are in place, as are plant quarantine restrictions. “We must reopen the existing PTA with Mercosur and include the tariff reduction on sunflower oil in the trade agreement,” a government official told Business Standard on condition of anonymity.
According to the official, India is also looking into reviving sunflower plantations in South India in order to meet some of the country’s domestic demand in the long run.
India imports 60% of its edible oil requirements, with sunflower oil accounting for approximately 14% of such imports. In 2021, India imported 90% of the $2.4 billion in crude sunflower oil from Ukraine and Russia, while Argentina imported only $233 million.
Since Russia’s invasion of Ukraine nearly a month ago, the domestic price of sunflower oil has risen to Rs 190 per litre from Rs 140-150.
