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Palm oil’s share of India’s annual vegetable oil imports is expected to fall below soft oils for the first time, as its higher price compared with soybean oil and sunflower oil pushes Indian refiners toward alternatives, according to the head of an industry body.
Lower palm oil imports by India, the world’s largest vegetable oil importer, could pressure benchmark Malaysian palm oil prices while supporting US soybean oil futures.
Sanjeev Asthana, president of the Solvent Extractors’ Association of India, told Reuters that palm oil has become expensive because of supply issues, so buyers are naturally shifting to soybean oil and sunflower oil.
Asthana, who is also CEO of Patanjali Foods Ltd., said India’s palm oil imports in the 2024–2025 marketing year ending in October 2025 could fall to 7.5 million metric tonnes, the lowest level in five years.
He noted that palm oil is losing market share to soft oils, especially sunflower oil and soybean oil, which are expected to record slightly higher import volumes.
Shift in India’s Vegetable Oil Market
Soft oils are oils that remain liquid at room temperature, while palm oil solidifies.
In the previous marketing year, palm oil accounted for 56% of India’s total vegetable oil imports. During the first three months of the current year, its share fell to 43%, according to SEA data.
Palm oil has traded at a premium to rival oils in recent months after floods affected supplies from top producers Indonesia and Malaysia, while Jakarta moved to increase palm oil use in biodiesel production.
However, Asthana said the current price gap is not sustainable and expects palm oil to return to a discount within two months, which would encourage Indian buyers to raise imports again.
Soft Oil Imports Rise to Offset Palm Oil Decline
India’s soybean oil imports may rise this year by 1 million to 1.5 million tonnes compared with 3.4 million tonnes last year, while sunflower oil imports are expected to be slightly above last year’s record level of 3.5 million tonnes.
India depends on imports to meet around two-thirds of its vegetable oil needs. It imports palm oil from Indonesia, Malaysia, and Thailand, while soybean oil and sunflower oil are sourced from Argentina, Brazil, Russia, and Ukraine.
Asthana said rising availability of domestic oils will help meet additional demand, keeping India’s total vegetable oil imports steady at around 16 million tonnes this year.
Source: Reuters