Ukraine crisis threatens sunoil supply, fuels vegoils rally

Ukraine crisis threatens sunoil supply, fuels vegoils rally

MUMBAI- Uncertainty over sunflower oil supplies due to the conflict between Russia and Ukraine is spurring demand for rivals palm oil and soyoil, fuelling a red-hot vegetable oil market.

The Black Sea accounts for 60% of world sunoil output and 76% of exports, so the uncertainty over how the crisis in the region may impact crop production and movement has prompted buyers to seek alternative oils.

Surging palm oil and soyoil prices could hit new record highs in the short term, and squeeze price-sensitive Asian and African consumers already reeling from spiralling fuel and food costs, analysts and traders said.

"We are facing a perfect storm," James Fry, chairman of commodities consultancy LMC International, told Reuters.

Buyers are already struggling to secure replacement supplies after Indonesia, the top exporter of palm oil - the most-produced edible oil - restricted exports this year while drought slammed output of soyoil - the second most produced edible oil - in South America. Vegetable oil buyers were banking on sunflower oil, the fourth most produced oil after rapeseed oil, to plug the supply gap. Russia's move to order troops into separatist regions of eastern Ukraine has now raised fears of supply disruption.

Sunflower oil vessel loading has already been