More Stories

Informist, Wednesday, Mar. 25, 2026

 

By Taniva Singha Roy and Abhijit Doshi

 

MUMBAI - With the war in West Asia already in its fourth week and showing no signs of resolution, one of the most vital consequences for the global economy has been the hit to supply chains of various commodities. Given India's heavy dependence on import of edible oils, an increase in their prices has been the most immediate effect of the crisis.

 

Since the hostilities started, edible oil prices have registered a significant rise. "Edible oil prices across India have risen sharply over the past four weeks, with several key varieties up between 6% and 14% since late Feb," Indrajit Paul, head of research at Agrocorp International, said.

 

The surge is being driven by a combination of the war in West Asia leading to higher global crude oil prices, rising freight costs, and a slowdown in import shipments, raising concerns among traders, processors, and consumers ahead of the summer demand, Paul said.

 

India is the largest importer of vegetable oils and nearly 60% of India's annual edible oil consumption is met through imports. During Nov-Feb, total edible oil imports by India rose to 5.22 million tonnes from 4.89 million tonnes a year ago. Vegetable oil imports during Nov-Feb rose to 5.32 million tonnes from 5.02 million tonnes a year ago.

 

As may be expected, the import costs are now rising, as are domestic market prices of these oils. Since Feb. 27, prices of crude palm oil at Kandla port rose by INR 165 or nearly 16% to INR 1,341 per 100 kg. Similarly, domestic refined soyoil prices rose nearly 14% to INR 1,509 per 100 kg, according to Paul. "A surge in soyoil prices has also led to 50% of millers' and crushers' revenue coming from soyoil alone," he said.

 

Sunflower oil prices rose INR 88 since the end of February to INR 1,598 per 100 kg, and mustard oil prices were up INR 180 at INR 1,490 per 100 kg.

 

Sunflower oil has seen the most severe supply disruption, as its trade flows through the Black Sea route. Soyoil is moderately affected, with longer and more expensive shipment routes from South America adding to costs, according to Paul. Meanwhile, palm oil has been the least affected in terms of supply, though prices have still risen due to higher crude oil prices and increased biofuel demand, he added.

 

Global benchmark prices have also moved up — Chicago soybean oil futures gained around 5.5% over the same period, while Malaysian palm oil on the BMD exchange rose around 12%, market participants said. Sunflower oil rose to $1,440 per tonne from $1,390 per tonne, up $50 per tonne or 3.6%, said Aashish Acharya, vice-president at Patanjali Foods Ltd.

 

One of the main drivers of prices is the rise in freight costs, Acharya said. Freight charges have increased to $120-$130 per tonne from $70-$80 per tonne since Feb 27, he said. "The ongoing conflict has had a significant impact on India's edible oil imports, despite sourcing being diversified across regions," Acharya said.

 

For India, palm oil is largely imported from Southeast Asian counties Indonesia and Malaysia, soyoil is sourced mainly from Argentina and Brazil, and sunflower oil is imported from the Black Sea region, which is Ukraine and Russia, he said. The ongoing conflict has created logistical and supply chain challenges across global shipping routes.

 

GOING AHEAD

Market participants expect prices to remain elevated but broadly range-bound in the near term, barring further escalation in the conflict. "High prices are already beginning to dampen demand, which should help limit further upside," Paul said.

 

Soyoil is expected to trade in the range of INR 1,420–INR 1,520 per 100 kg and may touch INR 1,600 per 100 kg if the war escalates further, according to analysts. Palm oil is seen in the range of INR 1,280–INR 1,380 per 100 kg. Mustard oil is expected to remain stable to slightly lower, supported by domestic supply, they said.

 

So far, there is no indication of a structural shortage in the market. The current price rise is largely a reflection of global uncertainty and higher import costs, Paul said. "As the situation stabilises and imports normalise, prices are expected to ease," he added.  End

 

Edited by Avishek Dutta

 

For users of real-time market data terminals, Informist news is available exclusively on the NSE Cogencis WorkStation.

 

Cogencis news is now Informist news. This follows the acquisition of Cogencis Information Services Ltd. by NSE Data & Analytics Ltd., a 100% subsidiary of the National Stock Exchange of India Ltd. As a part of the transaction, the news department of Cogencis has been sold to Informist Media Pvt. Ltd.

 

Informist Media Tel +91 (22) 6985-4000 

Send comments to feedback@informistmedia.com

 

© Informist Media Pvt. Ltd. 2026. All rights reserved.