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Informist, Friday, Feb. 20, 2026

 

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--Agrocorp Paul: Soyoil imports may not exceed palm oil despite trade deal
--Agrocorp Paul: Palm oil currently $100 per tonne cheaper than soyoil
--CONTEXT: Agrocorp research head Indrajit Paul's comments in interview
--Agrocorp Paul: Global soymeal prices lower than Indian prices
--Agrocorp Paul: Export demand for Indian soymeal unlikely to revive this year
--Agrocorp Paul: Palm oil's share in India's edible oil imports at 60%
--Agrocorp Paul: Soymeal in domestic market being substituted with DDGS
--Agrocorp Paul: India may import 500,000 tn DDGS from US amid trade deal
--Agrocorp Paul: Groundnut output for 2025-26 seen at 9.0-9.5 mln tn
--Agrocorp Paul: Mustard seed acreage up 3% in 2025-26
--Agrocorp Paul: Edible oil sector bearish in 2026 on supply pressure

 

By Taniva Singha Roy and Abhijit Doshi

 

MUMBAI - Despite the India-US trade deal and a reduction in import duty on products from the US, imports of soyoil are unlikely to rise sharply or result in a reduction of palm oil imports as the latter commodity is cheaper by as much as $100 per tonne. There could, however, be a marginal increase in soyoil imports from the US, says Indrajit Paul, research head at Agrocorp International Pte. Ltd., a global agricultural commodity trading and processing company headquartered in Singapore. Meanwhile, the edible oil industry is waiting for clarity on the deal.

 

Talking about soymeal, Paul says export demand for Indian soymeal will remain subdued this year because prices of Indian soymeal are far higher than prices of soymeal from South American countries. The price of Indian soymeal is also higher than that of its alternative, distiller's dried grains with solubles, which is amply available. With ethanol plants increasingly using maize and rice as feedstock, the supply of the byproduct distiller's dried grains with solubles in the domestic market has risen significantly. Additionally, India is likely to import 500,000 tonnes of distiller's dried grains with solubles from the US following the trade deal. This will further depress soymeal demand.

 

Paul says the outlook for the edible oil sector in the oil year 2025-26 (Nov-Oct) is bearish on account of supply-side pressure. There is ample supply of palm oil from countries such as Indonesia and soybean is also available in surplus. Meanwhile, India has increased its production of mustard oil. Hence prices of any of the edible oils are unlikely to rally this year.

 

On self-sufficiency in edible oils, Paul says it will take some time for India to achieve this as palm oil plantations in the country are still in the initial stages. Production of oilseeds such as mustard has increased in the last 4-5 years, but self-reliance in edible oils cannot be achieved on the basis of higher mustard seed production alone, he points out. For that, or even to simply reduce import dependence, policy intervention is needed, he says. The government should also consider allowing genetically modified crops to increase productivity.

 

Following are edited excerpts from the interview:

 

Q. The trade deal with the US allows import of soyoil from that country at reduced tariffs. How do you see it affecting the soy sector in India? Do you see it leading to a reduction in Indian imports of palm oil?

A. It was initially believed that the trade deal would be helpful for India because India meets 60% of its domestic edible oil demand through imports. But if looked at (in terms of) the price spreads of palm oil, soyoil, and sunflower oil, currently palm oil is $100 (per tonne) cheaper than soyoil. So, even though, as per the India-US deal, the duty is reduced to 0%, demand for palm oil is unlikely to be affected as it is cheaper.

 

There could be a marginal increment in the US share of India's soybean oil imports. India could also import some share from South American nations such as Argentina. But soyoil imports would not pick up so much that they could impact palm oil demand, because prices are still on the higher side for US soyoil.

 

Moreover, it is unclear whether only the US will be reducing duty or even India will slash import duty. A solid structure has not come out yet and it is not known whether it would be 0% duty or between 0% and 10%. There could also be a tariff rate quota of about 200,000-250,000 tonnes for soyoil imports, that is also unclear at this point of time. The industry is awaiting clarity on the trade deal.

 

Q. India's soymeal exports in January fell nearly 54% on year to 132,440 tonnes due to relatively uncompetitive prices. Do you see export demand for soymeal increasing anytime soon and prices recovering?

A. Global soymeal prices have been on a downtrend this year. Which is why Indian soymeal, in terms of the export market, was unable to compete with nations such as Brazil or Argentina because their exports are way cheaper. India can be called a residual exporter, because India exports whenever there is price parity.

 

This year as Indian soymeal prices were higher compared to Argentina or Brazil or even the US, exports have been fading out. Maybe in the months of October and November, exports will be higher. But the figures are saying exports are already quite down compared to last year. Indian soymeal exports will not recover unless there is some weather-related event in South America. If Argentina faces some weather disruption and prices rally in those countries, only then can there be some recovery in overseas demand for Indian soymeal. Otherwise, it's not possible for soymeal exports from India to increase this year.

 

Q. How do you see China's role in the emerging global soybean scenario?

A. China had shifted to Brazil initially for their soybean imports. But when the trade deal with the US happened, December onwards, China imported some quantity from the US. The US said they had signed a deal for 12 million tonnes and subsequent 25 million tonnes of soybean for being exported to China in further three years.

 

China recently this year, from January, has booked a lot of soybean cargo from the US. They have surpassed 12 million tonnes, which the deal said. But let's see when the shipment happens.

 

However, they are also buying a lot of soybean from Brazil. And in the past 5-7 years, they have transitioned from US to Brazil because the latter have increased their production and it is way cheaper compared to the US.

 

But as per this trade deal, the US said that about 12 million metric tons will be bought by China. But I see around, like, 15 million tonnes could be possible by the end of this marketing year, which China could buy from the US.

 

Q. Isn't China also trying to cultivate soybean on its own?

A. Yes, China is boosting its domestic production. They were earlier growing non-genetically modified beans like India. Now they are transitioning towards genetically modified soybeans. So, in the next 10 years, China will also grow a huge amount of soybeans for domestic consumption. That will disturb the global trade.

 

Q. Indonesia has halted its biofuel programme even as it plans to bring more areas under palm cultivation. Do you see these developments intensifying the competition between palm oil and soyoil in the marketplace?

A. Indonesia halting its B50 biofuel blending programme (to blend ethanol with petrol in a 50-50 ratio) will lead to oversupply of palm oil. Which will again build pressure on prices. Because initially Indonesia said they will move from B40 to B50, which is why they started to increase palm cultivation.

 

If they decide to shift to B50, then the extra volume that will be available from the expanded area will be absorbed domestically. But if they are sticking to the B40 mandate, the extra volume of palm oil produced will turn into an exportable surplus. That will again build pressure on palm oil prices globally. Hence, palm might remain at a discount to other oils like soybean and sunflower oil.

 

Q. India's imports of palm oil were 215% higher on year in January. Will this lead to domestic oil prices cooling? What is the reason for such a hefty increase in imports?

A. On a yearly basis, in January, India imported significantly higher amount of palm oil. It imported about 757,000 tonnes of palm oil compared to 240,000 tonnes last year. In 2025, the spread was $147 premium, which means palm oil was selling at a premium to soyoil. That's why the import number in January 2025 was so low. But this year, palm oil is nearly $95-$100 cheaper than soyoil, which is why imports are significantly higher on year. 

 

Q. Do you think, the way things are going, India's edible oil imports will remain palm oil-centric?

A. About 60% share of total edible oil imports will remain palm oil and rest will be divided among sun and soyoil. Soyoil imports will be about 30% and the rest will be with sunflower oil, because it is trading at a premium. Palm oil imports will continue to remain on the higher side as compared to other oils.

 

Q. Do some people prefer soyoil, although it may be costlier, for its properties?

A. Yes, but that is again on the preference, but if we see the imports, that purely depends on prices of oils. Whichever is cheaper, it is imported in larger quantity. For example, in 2024, sunflower oil prices were cheaper. So sunflower oil imports jumped that year. Similarly, in the previous year, soyoil imports were higher because it was cheaper as compared to palm oil. This year, palm oil should get preference according to the prices. Next will be soyoil and the third preference will be sunflower oil.

 

Q. Is there any seasonality in this pricing?

A. Yes, seasonality also influences prices. In the festive season, definitely there are cargos ful1 of imported edible oils coming into India and that time the prices are higher even for palm oil. During winter months, palm imports are relatively lower as compared to the soft oils due to its nature. Palm solidifies in winter temperatures. So definitely seasonality impacts import as well as the price spreads.

 

Also, as soon as the soybean harvest for the South American nations starts, soyoil prices fall. During that time soyoil gets preference over other oils. So, seasonality works this way.

 

Q. Due to easy availability of DDGS, soymeal demand for feed has fallen. What will help revive demand for soymeal? Can government policy help?

A. From the last 2-3 years, soymeal in the domestic market is being substituted with distiller's dried grains with solubles because ethanol plants came up and the ethanol blending policy came into the picture. India has switched more on to ethanol production. About 11 million tonnes of corn has been crushed to produce ethanol, plus rice is also being converted to ethanol this year. So, both rice and corn DDGS are readily available. Domestic production of DDGS is already about 6 million tonnes, which will destroy the demand for soymeal.

 

In the previous 2-3 years, considerable amount of this DDGS has been rationed as a substitute to soymeal in the poultry industry and currently with the India-US deal it is being said that about 500,000 tonnes of DDGS will be imported by India from the US. That will again add up to the pressure of falling soymeal demand.

 

US DDGS is of better quality compared to domestic DDGS as the aflatoxin levels are lower. If the US variety comes to India, people will prefer that over the Indian DDGS.

 

In the near term, soymeal demand is unlikely to revive. Another factor affecting soymeal demand is price. DDGS domestically is almost half the price of soymeal. Hence, unless soymeal prices cool down and compete with DDGS prices, demand will not improve.

 

Q. What is the outlook on the edible oil sector in general for 2025-26?

A. For 2025-26, in terms of prices, palm oil is likely to be the cheapest as there is ample supply. Indonesia will be pumping out more as they will be producing more palm oil this year. So, it will add to the supply.

 

Meanwhile, soybean production is also likely to be higher. In South America, soybean production is on the upper side as compared to last year. Even US soybean crushing is going at a higher pace than a year ago. So, soyoil supply pressure will also increase.

 

Overall the availability of palm oil and soyoil will remain on the higher side and prices will remain range-bound to bearish. This year, edible oil prices are unlikely to rally much, due to heavy supply situation in most of the origins.

 

Q. NITI Aayog had some time ago prepared a report which said India will not be self-sufficient in edible oil for a long time. How do you react to this finding? What would you suggest to make India aatmanirbhar, or self-reliant, in the edible oil sector?

A. It will take some time for India to become self-sufficient in edible oil because the palm oil plantations in India are at the initial stages. To get good productivity from those plants, it will take some time. Apart from palm, other oilseeds output is quite low. Soybean yield in India is lower compared to the US, Argentina, or Brazil.

 

So, if some preference is given to genetically modified crop, then some increase in yield per hectare can be seen. For oilseeds such as mustard, production has been increased in the last 4-5 years. But on the basis of higher mustard production alone, self-reliance in the edible oil sector cannot be achieved. There needs to be increased productivity in all nine oilseeds which are produced in India. Otherwise, if today about 60-65% of the consumed quantity is being imported, it will remain constant. Gradually, in the next five years, the share might fall to 40-45%. But if genetically modified crops are not allowed it is very difficult to get self-sufficient status. Because India's population is growing and consumption demand is also growing on a yearly basis.

 

Q. How much output of soybean oil and sunflower oil are expected during the current oil year?

A. Soyoil production for oil year 2025-26 (Nov-Oct) is somewhere around 1.3-1.4 million tonnes. For sunflower oil, it is very low, around 35,000-40,000 tonnes only.

 

Q. What are your estimates for mustard and groundnut production for the ongoing oil year? What is your outlook on prices of mustard seed and groundnut?

A. Groundnut output for this year is expected to be about 9.0-9.5 million tonnes. In terms of mustard seed, area has increased this year by about 3% as compared to last year and production could go up to about 12.0-12.5 million tonnes against last year's number of about 11.1 million tonnes.

 

In terms of prices, mustard seed price is likely to remain on the weaker side. If INR 6,700 per 100 kg does not hold, prices can drift toward INR 6,200 per 100 kg, which coincides with the minimum support price. That level is likely to attract policy and physical support. Until INR 7,100–INR 7,200 is reclaimed, rallies should be viewed as corrective.

 

Meanwhile, groundnut prices have corrected sharply after a strong rally to INR 7,800 per 100 kg. Immediate support is seen at INR 6,700–INR 7,000. If that zone holds, prices may stabilise, otherwise they could test INR 6,500 per 100 kg. Overall price outlook for groundnut is positive in the medium term but corrective in the short term.  End

 

Edited by Rajeev Pai

 

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