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Informist, Thursday, Dec. 11, 2025

 

By Taniva Singha Roy

 

MUMBAI - As edible oil imports become more expensive with the rupee depreciating to an all-time low against the dollar, several refiners have cancelled import contracts for December and January, market sources said. The impact of more expensive imported crude edible oils is expected to spill over into domestic oilseed prices, they said. This will be visible from January, they added.

 

With imports becoming costlier, millers are left with little choice but to procure domestic oilseeds for crushing, traders said. The rupee, which has been sliding for some time now, hit a new all-time low of 90.48 to the dollar Thursday. According to Sandeep Bajoria, chief executive officer of the Sunvin Group, contracts for about 70,000 tonnes of crude soybean oil for December and January have been cancelled as prices of imported soyoil rose INR 2 per litre.

 

Sunflower oil free-on-board prices have risen to $1,345 per tonne for December and January offers, from around $1,330 per tonne in November, because of rupee depreciation, Rahul Chauhan, director, Igrain India, said. Bajoria said that on average, the landed cost of global edible oils has risen INR 3 per litre.

 

Given the situation, demand for domestic oilseeds, which had been sluggish the past few months, is likely to perk up. Prices of soybean, which have been well below the minimum support price of INR 5,328 per 100 kg, are likely to rise INR 500 per 100 kg in January, Narendra Porwal, a trader from Ratlam in Madhya Pradesh, said.

 

The improved demand is likely to coincide with lower availability of oilseeds, traders said. This is expected to support oilseed prices. Soybean harvesting ended in November and farmers are offloading their stocks in the market to benefit from the government's Bhavantar scheme, implemented primarily in Haryana and Madhya Pradesh. The scheme is designed to protect farmers from market price volatility by paying compensation when the selling price of their produce falls below a determined model rate. Currently, soybean prices are between INR 2,500 and INR 4,700 per 100 kg, depending on variety, at key domestic spot markets.

 

Likewise, with prices of imported sunflower oil moving up, millers' demand for groundnut is seen rising in January, said Ashok Virvani, a trader from Gujarat. Sunflower oil and groundnut oil are often used interchangeably, especially in general cooking, as both have high smoke points and neutral flavours. But arrivals of groundnut will also start falling now with peak arrival season over, Virvani said. Arrivals of groundnut typically peak in October and November.

 

Ashish Acharya, vice-president at Patanjali Foods Ltd., believes the cancellation of contracts will only affect about 20% of total imports. This, he says, is not such a big deal and will not impact domestic edible oil and oilseed prices much. But Chauhan believes that with stocks at ports dropping as of Nov. 30, domestic edible oil prices are likely to rise INR 20-INR 30 per 10 kg and oilseed prices are likely to go up INR 150 per 100 kg by the end of December.

 

Soyoil stocks at Indian ports as of Nov. 30 were 2.15 million tonnes, down nearly 18% from Nov. 15, according to data from Igrain India. Stocks of sunflower oil as on the date were down 4% at 1.23 million tonnes.

 

Imports were already down in November, Bajoria said, and will fall further in December because of higher prices. He expects palm oil imports in December to be of the order of 650,000 tonnes. Import of soyoil is seen at 350,000 tonnes and that of sunflower oil is expected to be 130,000 tonnes.

 

In November, palm oil imports are likely to have risen over 6% on month to 634,000 tonnes. Imports of crude soyoil, which was the top performer until October, are likely to have fallen 11% on month and 9% on year to 371,000 tonnes in November, according to Rajesh Patel, managing partner at GGN Research. Sunflower oil imports are estimated at a two-year low of 143,000 tonnes, down a significant 45% on month and 58% on year, according to GGN Research.  End

 

Edited by Rajeev Pai

 

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