InfoSAWIT, MUMBAI - The Indian vegetable oil market is undergoing significant changes. For the first time, the annual import share of palm oil is expected to fall below that of softer vegetable oils such as soybean oil and sunflower oil. This shift is attributed to soaring palm oil prices, prompting Indian oil processors to switch to more affordable alternatives.
Sanjeev Asthana, President of the Solvent Extractors’ Association (SEA) of India, revealed that disrupted palm oil supplies have led to price increases, causing palm oil to lose its competitiveness against other vegetable oils. "Palm oil has become increasingly expensive due to supply issues, leading buyers to turn to soybean and sunflower oils," he stated, as reported by InfoSAWIT from Reuters on Tuesday (February 25, 2025).
According to Asthana, India's palm oil imports for the marketing year 2024/2025, ending in October 2025, could plummet to 7.5 million metric tons, the lowest in five years. Meanwhile, softer vegetable oils are predicted to take over the dominance of palm oil in India's total vegetable oil imports.
SEA noted that in the previous marketing year, palm oil accounted for 56% of India's total vegetable oil imports. However, in the first three months of this year, its share has shrunk to 43%. This trend is driven by the continued rise in palm oil prices, exacerbated by extreme weather in Indonesia and Malaysia, as well as biodiesel policies in Jakarta that increase domestic palm oil consumption.
"Current palm oil prices are too high and unsustainable. However, in the next two months, if palm oil is traded at more competitive prices, Indian imports will increase again," Asthana added.
Currently, India relies on palm oil imports from Indonesia, Malaysia, and Thailand, while soybean and sunflower oils are sourced from Argentina, Brazil, Russia, and Ukraine.
Asthana estimates that soybean oil imports this year could rise by 1 million to 1.5 million tons from last year's 3.4 million tons. Meanwhile, sunflower oil imports are expected to increase slightly from last year's record of 3.5 million tons.
Despite the shift in import composition, India's total vegetable oil imports this year are expected to remain stable at around 16 million tons, bolstered by increasing domestic production. This change in trend marks a new chapter in the dynamics of India's vegetable oil market amid global challenges. (T2)
