InfoSAWIT, NEW DELHI — After five months of sluggishness, India's palm oil demand sharply increased in April 2025. This rise was driven by lower palm oil prices compared to other vegetable oils and more favorable import margins, according to a report from Platts, part of S&P Global Commodity Insights.
As the world's largest palm oil importer, India has shown a strong preference for palm oil over soybean oil. Currently, crude palm oil (CPO) is offered at a lower price than soybean oil, making it the preferred choice for local buyers.
"Import margins for palm oil are currently positive, while for competing products like olein, sunflower oil, and soybean oil, they remain negative. Therefore, Indian buyers tend to opt for palm oil," said a market source as reported by Reuters.
Another source added that Indian buyers are very price-sensitive and margin-conscious. "Given the current favorable conditions, they will certainly restock, especially since purchases in recent months have been relatively low," he noted.
Data from the Solvent Extractors’ Association of India shows that India's palm oil imports increased by 13.7% to 424,599 metric tons in March, up from 373,549 metric tons in February. However, this figure is still 38% lower compared to the same period last year.
The decline in global palm oil prices is primarily attributed to increased production and stocks in Malaysia, along with market concerns over potential tariffs from the United States. This has led to a drop in CPO prices throughout April.
The third-month CPO futures contract on the Malaysian Exchange recorded a 10.55% decrease since the beginning of the month, settling at MYR 4,035 per metric ton (equivalent to USD 919.55/mt) as of April 23.
Currently, palm oil is approximately USD 50/mt cheaper than soybean oil, a stark contrast to March when soybean oil was USD 70–100/mt cheaper than CPO.
Physical CPO prices for May delivery to the West Coast of India were recorded at USD 1,065/mt on April 23, while June deliveries were offered USD 15/mt lower. Platts assessed the CPO CFR West Coast India price at USD 1,055/mt, down 10.21% from the start of the month.
Palm Oil Production Increases
On the supply side, increased production in Malaysia — the world's second-largest palm oil producer — is expected to continue exerting downward pressure on global prices. Data from the Southern Peninsular Palm Oil Millers Association indicates a production increase of 9.11% for the period of April 1–20 compared to March, with a yield increase of 0.27% and a harvest 7.69% higher.
Meanwhile, supply from Indonesia, the world's largest palm oil exporter, is also reported to be stable and strong. "Currently, the majority of palm oil from Indonesia is being shipped to India," said a market participant.
Indonesia and Malaysia together account for approximately 85% of the total global palm oil supply.
Demand from China Remains Slow
In contrast to India, demand from China, the second-largest palm oil importer, remains sluggish. "Vegetable oil stocks in China are indeed low, and they are still restocking to meet basic needs, but demand is very limited," said a trader.
Another market participant revealed that China's purchases are currently very cautious and only made as needed, without significant increases in import volumes.
With competitive prices and rising production, palm oil is once again demonstrating its competitiveness in the global market, particularly in India. However, market dynamics will still be influenced by the responses of other major buyers like China and potential global trade policy upheavals. (T2)
