More Stories

Informist, Wednesday, May 20, 2026

 

By Taniva Singha Roy

 

MUMBAI - India's edible oil import bill rose sharply in the first half of the current oil year and is expected to remain elevated in the second half, as demand-supply dynamics, the conflict in West Asia, and a weakening rupee are likely to keep imports high in value terms, market experts said.

 

In the first half of the edible oil year 2025-26, which began in November, India's edible oil imports rose 19% on year to INR 870 billion, according to the Solvent Extractors' Association. The war in West Asia led to elevated crude oil prices and higher freight rates, which in turn raised the landed cost of edible oils, traders said. Prices are likely to remain elevated in the near-term due to uncertainty surrounding the conflict, they added. In volume terms, India imported 7.82 million tonnes of edible oil during Nov-Apr, up 13% from the year-ago period.

 

At the peak of the disruption in March, freight and insurance costs for shipments to India surged across major ports, raising landed costs for edible oil. Crude soybean oil saw the sharpest rise, with import parity increasing to about $80–$110 per tonne above domestic prices, while crude palm oil and sunflower oil parity rose $50–$65 per tonne at the peak. The rupee's depreciation against the dollar is likely to keep prices elevated in the coming months.

 

In the second half of the oil year, crude palm oil prices are likely to rise by nearly 8%, as forecasts from Indonesia's meteorological agency indicate an earlier-than-normal dry season across key Sumatran growing regions from April, which could trim yields, according to Indrajit Paul, head of Research at Agrocorp International. Indonesia's biofuel programme could also reduce the availability of palm oil.

 

Crude soyoil prices could rise by nearly 5%, although record global crushing levels may limit further gains. Crude sunflower oil prices could rise by 8–15% through Aug–Sept before easing from October onwards, market participants said. Ukraine's sunflower seed production in 2025-26 is estimated to be about 11% lower than last year's level, according to Agrocorp International.

 

The rupee has already depreciated to a record low of 96.96 against the dollar as of Wednesday, marking a fall of about 12% on-year, driven by India's widening current account deficit and persistently high energy import costs. "Every 1?preciation in the rupee adds approximately 1% to India's edible oil import bill, regardless of international price movements," Paul said.

 

Moreover, domestic production remains insufficient for millers to rely solely on local supplies, making imports inevitable despite elevated costs, market participants said. The 2025–26 soybean kharif crop was affected by erratic monsoon distribution across Madhya Pradesh and Maharashtra. As a result, India's soybean production is estimated at 9.5 million–10 million tonnes, compared with 15.1 million tonnes a year earlier. This would be insufficient to meaningfully reduce import dependence, Paul said.

 

India remains almost entirely dependent on imports of sunflower oil, as domestic production offers little meaningful buffer. Domestic mustard seed availability is higher than that of other oilseeds, but supplies are being depleted faster than usual as crushers increasingly prefer processing local seed over importing costly crude oils.

 

Import volumes in the coming months will largely depend on local oilseed production, weather developments, including El Nio's impact on crop output, global edible oil availability, and currency movement, which directly impact import costs and overall buying parity, Aashish Acharya, vice president at Patanjali Foods, said. "Therefore, overall edible oil imports are expected to remain supported, considering steady domestic consumption demand," he said.

 

For the second half of the oil year, palm oil imports are estimated at 4.2 million-4.4 million tonnes, while soyoil imports are expected at 2.5 million-2.7 million tonnes. Sunflower oil imports are likely to remain around 1.3 million-1.5 million tonnes, depending on Black Sea supply and price competitiveness against other oils, Acharya said.

 

Meanwhile, in the first half of the oil year, crude palm oil imports were at 3.91 million tonnes, up from 1.97 million tonnes a year ago, according to the Solvent Extractors Association. India's crude soyoil imports during the same period fell to 2.10 million tonnes from 2.27 million tonnes a year ago. India imported 1.54 million tonnes of sunflower oil during Nov-Apr, up from 1.49 million tonnes a year ago, according to the association.

 

DOMESTIC OILSEEDS

Oilseed prices in India have recovered sharply on year in May as millers and refiners shift towards domestic oilseeds from costly imported oils. "Soybean prices in Indore have recovered sharply to around INR 7,500 per 100 kg, up nearly 50% from their 2023–24 lows. Soyoil prices have similarly rebounded from INR 830–850 per 10 kg to approximately INR 1,450–1,550," Paul said. The market is clearly transmitting import cost pressure onto domestic oilseed prices and this will continue as long as import costs remain elevated, he said.

 

With imported edible oils becoming costlier, there could be some shift in consumer preference towards mustard oil, especially in north and east India, where mustard oil consumption is traditionally strong, Mahesh Sameriya, a Kota-based trader, said. Mustard oil is relatively stable in terms of domestic availability and benefits from strong consumer acceptance across many regions.

 

India is expected to produce a good mustard crop of around 10.5 million-11 million tonnes this year, which, after crushing, may contribute to nearly 15% of the country's total edible oil consumption. However, even with higher mustard production, it will not be sufficient to fully replace imported soft oils, as India's total edible oil consumption remains much larger, at 25 million tonnes to 25.5 million tonnes, than domestic oilseed output capacity.

 

"Sunflower seed availability in India remains limited compared to overall demand, and groundnut availability is also region-specific," a trader said. Despite increased domestic production of some oilseeds, India still cannot fully meet its edible oil demand through domestic sources alone, as it remains dependent on imports for nearly 60–65% of its edible oil requirement. Therefore, imports will continue to play a major role, Acharya said.

 

However, El Nio this year could lead to an increase in oilseed acreage, as farmers usually shift from grains to oilseeds in such a scenario, since grains are more affected by El Nio, Paul said. But yield does not depend on the acreage alone, it also depends on rainfall. If there is inadequate rainfall in the main growing regions, yields will not improve much, he said. The forecast from the India Meteorological Department suggests a 62% chance of a transition from neutral conditions to El Nio in Jul-Aug, with El Nio likely to persist until the end of 2026.

 

RETAIL PRICES

The cost pressures at the import and crushing level are already being transmitted to wholesale prices and will continue to be passed through to consumers over the coming months, Paul said. "If current import price levels persist, retail prices could rise a further 8–15% for refined palm oil and 12–20% for sunflower oil over the next three to six months," he said.

 

Mustard oil is also not immune to domestic supply constraints amid rising demand, which could push mustard oil retail prices up 10–18% through the remainder of 2026, he added.

 

Higher import costs are likely to keep retail edible oil prices firm in the domestic market. Since India depends heavily on imports to meet edible oil requirements, any increase in global prices directly affects local refining costs and retail prices, Acharya said.

 

If geopolitical tensions continue and energy prices remain elevated, international edible oil prices may witness further volatility in the near term. However, the extent of the retail price increase in India will also depend on government intervention, the import duty structure, and overall domestic availability, according to market participants.

 

Commenting on a possible hike in import duty on edible oil, Paul said domestic prices will rise if the duty is increased. India is examining whether higher taxes would help local farmers fetch better prices for their crops, according to a media report. "If they increase it, it will create inflationary pressure in the country," Paul said.

 

Mustard prices are already at about INR 7,500 per 100 kg, above the minimum support price for 2026-27 of INR 6,200 per 100 kg, and soybean prices have also crossed INR 7,000 per 100 kg, higher than the minimum support price of INR 5,708 per 100 kg. As such, farmers are already making good money and there is no need to increase the import duty, he said.  End

 

US$1 = INR 96.84

 

Edited by Saji George Titus

 

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