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Informist, Monday, Feb. 9, 2026

 

MUMBAI – India's edible oil production is estimated at 9.6 million tonnes in the oil year 2025–26 (Nov-Oct), covering only about 40% of Indian needs and reinforcing the country's structural dependence on imports of around 16.7 million tonnes, the Indian Vegetable Oil Producers' Association said in a release. Imports are expected to comprise 8–8.5 million tonnes of palm oil, 5–5.5 million tonnes of soybean oil, 2.8–3.0 million tonnes of sunflower oil, and around 200,000 tonnes of other oils, including zero-duty imports routed through Nepal, the association said.

 

India's import basket remains highly sensitive to inter-oil price differentials, particularly between palm oil and soybean oil, it said. Palm oil imports have already declined from over 10 million tonnes in 2021–22 to around 8 million tonnes, as sustained premiums and competition from soybean and sunflower oil alter market share dynamics.

 

"A USD 50–60 per tonne shift in spreads is sufficient to reallocate volumes at scale, highlighting the absence of stickiness at the bulk oil level," Sudhakar Desai, president of the oil producers' association and chief executive officer of Emami Agrotech Ltd., said while addressing the United Overseas Bank Kay Hian Conference in Kuala Lumpur, Malaysia. Desai added that refining margins are under pressure and that is constraining demand momentum.

 

On the trade policy front, Desai said the recently concluded free trade agreement and bilateral arrangements with partners such as the US, European Union, Australia, the United Arab Emirates, and South Asian Free Trade Area members have become integral to market pricing and sourcing decisions. "These agreements now directly influence landed cost structures, arbitrage flows, and refining economics," he said, noting that further details on potential tariff concessions or quota mechanisms for US soybean oil will provide additional market clarity.

 

Under the trade deal with the US, there is a quota of 500,000 tonnes of corn distiller's dried grains with solubles announced Sunday, which will help the poultry and aquaculture sector. However, its impact on Indian soybean prices is yet to be assessed, according to the release.

 

GLOBAL OUTLOOK

Production of the four major vegetable oils is projected at 208.4 million tonnes in 2025–26, only marginally higher year-on-year, the association said. Palm and rapeseed oil output is increasing while sunflower oil production is constrained, it said.

 

"This limited supply growth leaves global balances vulnerable to weather and policy disruptions, keeping inter-oil competition intense and price spreads unstable, with sunflower oil continuing to command a premium," Desai said.

 

Biofuel mandates have emerged as a dominant swing factor. Indonesia's biodiesel programme alone absorbs about 14 million tonnes of palm oil, while US biofuel policies continue to anchor soybean oil price expectations, according to the release. "Edible oils are increasingly functioning as energy-linked strategic inputs rather than pure food commodities, raising the price floor and strengthening correlation with crude and policy cycles," Desai said.

 

PRICE OUTLOOK

Malaysia's palm oil production for 2025-26 is seen at 19.9 million tonnes compared with 20.2 million tonnes last year and Indonesia's is seen at 51.8 million tonnes compared with 51.2 million tonnes a year ago, with replanting progress in both countries being slow, according to Desai. Near-term supply tightness could support prices until March. However, sustained premiums over soybean oil are expected to cap palm oil and sunflower oil consumption in India, according to the release. 

 

Desai expects palm oil prices on the Bursa Malaysia Derivatives to remain range-bound but policy-driven, with Apr–Jun trading in the 4,000–4,400 ringgits range and Jul–Sept in the 4,200–4,600 ringgits range, as palm oil and soybean oil compete for market share. Sunflower oil prices are likely to remain high until the next production cycle, he said.

 

In a market increasingly driven by policy shocks rather than traditional supply cycles, stable and predictable duty and mandate frameworks are critical to prevent unintended price transmission to consumers, Desai said. He reiterated the association's continued engagement with policymakers and global stakeholders to support balanced growth across the edible oil value chain.  End

 

Reported by Taniva Singha Roy

Edited by Rajeev Pai

 

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