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India, the world's largest vegetable oil buyer, has seen roughly 75,000 tonnes of soybean oil cargoes from Brazil and Argentina cancelled after a sharp rise in global prices created profit-taking opportunities for traders, four traders and analysts told Platts, part of S&P Global Commodity Insights.
Abhimanyu Solanki, director of KDC Agro & Textile Industries, said in a note on 27 February that the total volume of soybean oil contract washouts, or cancellations, could reach 100,000 to 120,000 tonnes, reflecting active position adjustments by importers.
A washout is an agreement allowing the buyer to resell the product back to the seller based on a pricing formula that accounts for current market prices.
Anilkumar Bagani, head of research at vegetable oil brokerage Sunvin Group, told Platts on 27 February that soybean oil washouts are occurring because buyers are booking healthy profits at current prices and do not want to hold cargoes for forward shipment.
A New Delhi-based vegetable oil analyst told Platts on 27 February that there is also a mismatch between global and domestic prices for soybean oil.
The landed cost of new-crop soybean oil from South America at Indian ports currently ranges between $1,050 and $1,070 per tonne. The domestic spot market, however, is trading closer to $1,020 per tonne. The analyst noted that an importer taking physical delivery today would face an immediate loss of $30 to $40 per tonne as soon as the vessel reaches the berth.
This is why importers are choosing to settle these contracts, paying or receiving the price difference in cash rather than absorbing the physical loss.
India's soybean oil imports hit a record 5.47 million tonnes in the 2024-2025 marketing year, running from November to October, driven by rising demand for light oils relative to palm oil, according to the Solvent Extractors' Association of India (SEA).
India imports soybean oil mainly from Argentina and Brazil, while sourcing palm oil from Malaysia and Indonesia.
In the current 2025-2026 marketing year, Indian buyers are expected to import about 8 to 8.5 million tonnes of palm oil, 5 to 5.5 million tonnes of soybean oil, 2.8 to 3.0 million tonnes of sunflower oil, and around 200,000 tonnes of other oils, including duty-free imports routed through Nepal, according to Sudhakar Desai, president of the Indian Vegetable Oil Producers' Association, who spoke earlier this month at a trade conference in Kuala Lumpur.
Market participants said sluggish demand in domestic markets is also prompting traders to reduce their exposure to expensive imports.
Tushar Agarwal, a vegetable oil analyst, told Platts: "Domestic supplies are cheaper, especially the ample supplies of mustard oil in the markets, so why take the risk? Demand is still weak, and offtake is slow too. Some buyers are also sourcing supplies from China and settling their Argentine supplies."
In the first quarter of the 2025-2026 marketing year, from November to January, India's total vegetable oil imports stood at 3.96 million tonnes, down 2% from the same period a year earlier. While palm oil imports rose, crude soybean oil imports fell 9% to 1.2 million tonnes, according to SEA data released on 13 February.
Platts assessed crude palm oil CFR West Coast India at $1,132.50 per tonne on 26 February, down 0.7% from the previous day.
On the origin side, crude palm oil FOB Indonesia was assessed at $1,110 per tonne on 26 February, down 0.9% on the day. Soybean oil FOB Up River Argentina was priced at around $1,114.66 per tonne, up 0.4%.
Source: S&P Global