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Informist, Monday, Jun. 29, 2026

 

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--SEA ED Mehta: Indian soymeal uncompetitive in international market
--CONTEXT: Solvent Extractors' Association ED BV Mehta in interview
--SEA ED Mehta: See distillers dried grains with soluble replacing rice bran
--SEA ED Mehta: See DDGS replacing soymeal for animal feed
--SEA ED Mehta: Edible oil prices up in last two to six months
--SEA ED Mehta: See El Nino affecting oilseed yields
--SEA ED Mehta: Dry spell in flowering stage of soybean may reduce yields
--SEA ED Mehta: World edible oil demand is rising by 2% per annum
--SEA ED Mehta: Edible oil prices unlikely to cool down in the coming months

 

By Taniva Singha Roy and Abhijit Doshi

 

MUMBAI - India has become uncompetitive in the global soymeal export market as the domestic prices are higher than in other markets, even as rising domestic demand from the livestock and poultry sectors has reduced exportable surplus, The Solvent Extractors' Association of India's Executive Director Dr. B.V. Mehta told Informist in an Interview.

 

After accounting for seed requirements, direct consumption and oil extraction, very little soymeal remains available for export. Unless domestic production rises substantially or India imports soybeans for processing, exports are expected to remain limited.

 

Moreover, the growing availability of distillers' dried drains with solubles, a by-product of ethanol production, has emerged as a major challenge for the soybean industry. Distillers' dried drains with solubles, or DDGS, is increasingly replacing rice bran, rapeseed meal and, to some extent, soymeal, in animal and poultry feed because of its competitive pricing. However, despite this substitution, soymeal prices have remained firm as oilseed prices are closely linked to edible oil prices, which have risen sharply in recent months.

 

Meanwhile, India's edible oil market is undergoing a structural shift, with soyoil imports rising faster than palm oil imports. This is largely because global availability of soybean oil is higher, while palm oil supplies have tightened as Indonesia diverts more production for its B50 biodiesel programme. As a result, palm oil imports into India have declined from around 9 million tonnes four years ago to nearly 7.5 million tonnes. Globally, an increasing share of vegetable oil production is also being used for biofuels rather than food, reducing edible oil supplies and keeping prices elevated.

 

Talking about demand for sunflower oil, Mehta said it accounts for roughly 3 million tonnes of India's annual edible oil consumption of around 26 million tonnes, making it a relatively small but important segment of the market. It enjoys strong demand, particularly in southern India, where consumers perceive it as a premium and pure cooking oil. In terms of pricing, sunflower oil is among the costlier edible oils, after groundnut oil, while palm oil, despite recent supply-driven price increases, has traditionally remained the cheapest option.

 

The current year outlook for India's oilseed sector remains heavily dependent on the monsoon and impact of El Nino. A prolonged dry spell during the flowering and pod formation stages of soybean and groundnut crops could significantly reduce yields. Lower rainfall would also diminish water availability for the rabi season, affecting crops such as mustard, which require multiple irrigations. Weak agricultural output would not only tighten edible oil supplies but also weigh on rural incomes and broader economic growth. Meanwhile, current kharif acreage data should be interpreted cautiously as sowing is still at an early stage and rainfall patterns remain uncertain.

 

Moreover, Mehta added that India's heavy dependence on edible oil imports also makes it vulnerable to currency depreciation and global supply disruptions. A weaker rupee has raised import costs, translating into higher domestic edible oil prices.

 

Following are the edited excerpts from the interview:

 

Q. In recent months, India's soyoil imports have risen faster than those of palm oil. Does this indicate a structural change in demand and consumption?

A. Soyoil imports are increasing more than palm oil as the availability of the former is much higher. The availability of palm is declining for human consumption as the Indonesian government is going ahead with its B-50 programme. It is using at least about 2 million tonnes to 2.5 million tonnes of palm oil for this purpose.

 

About four years ago, India's palm oil imports were about 9 million tonnes, but now it has reduced to about 7.5 million tonnes. Also, the overall supply of vegetable oil is decreasing for human consumption. The total vegetable oil production of the world is about 279 million, out of which about 68 million tonnes to 70 million tonnes are being consumed for biodiesel.

 

When crude oil prices crossed $100 per barrel, it made sense to make biodiesel. If crude oil prices fall below $75 per barrel, it makes little sense to do so.

 

Q. Why have India's soymeal exports fallen significantly?

A. In terms of soymeal export, India is totally out of the world market. The price of Indian soymeal is $600 per tonne, but price in the international market is about $423 or $425 per tonne. Also, demand from compound cattle feed is rising. After taking into account demand for soybeans for animal feed, direct consumption, and crushing, India is left with very little to export.

 

Q. How has soymeal demand been affected with DDGS being increasingly used for animal feed?

A. This is a big challenge for the entire soybean and oilmeal industry. The reason is that DDGS is replacing the rice bran and rapeseed in cattle feed, and to some extent, soymeal in the poultry industry.

 

And due to ethanol production, which is rising fast, the availability of DDGS is increasing year by year.

 

Q. Why are prices of soymeal increasing even though there is availability of DDGS?

A. The oil seed price moves in tandem with the edible oil prices. Edible oil prices in the international and also domestic markets in the last three months or six months have increased.

 

Earlier, oil seeds were being sold below minimum selling price, but as the edible oil prices have increased, seed prices, too, have risen. Hence, soymeal prices are higher in India.

 

Q. How important is sunflower oil in India, for consumption purposes?

A. Total consumption of edible oil in India is about 26.0 million tonnes. Sunflower oil consumption is about 3 million tonnes.

 

Definitely, sunflower oil is very popular in Southern India and also among housewives. Since it has a golden colour, there is a notion that it is a pure oil and not adulterated. So, sunflower has a niche market and it fits in the middle group.

 

After groundnut oil, sunflower oil commands the highest price, followed by cottonseed or rice bran and last is palm. Palm oil price has gone up because of supply constraints, but it was the cheapest oil earlier.

 

Q. In your assessment, what is the effect of El Nino going to be on the oil, seed and edible oil sector?

A. The current El Nino forecast is quite serious for India. Until July or August, there may be normal rain and after Aug. 15, there will be lesser rain.

 

Normally, August-end is flowering time for groundnut or for soybean and September month is the pod formation stage. If it rains less during this period, definitely it will impact the yield.

Moreover, India is getting rain in October or up to mid of November. Last year also, there was very good rain in September and October. Most of the dams were full, and there was better rabi crop.

 

Now, if there is less water in the dams, lakes and rivers, it will also have an impact on the rabi crop and particularly the mustard crop. The mustard crop needs about four to five waterings during the season.

 

Under the influence of El Nino, if there is a gap in rains of more than 10 to 15 days, it will affect the crop. Definitely, it is a concern for the industry, concern to the farmer and concern to the government.

 

Q. How do you read the current Kharif acreage figures for oil seeds?

A. The acreage is in a very early stage here. By the middle of July, it will give a better picture.

Right now, monsoon is delayed in the month of the oilseed growing stage and sowing is yet to pick up as there is no rainfall. There is no sowing. Last year, there was early sowing because of the early monsoon. So, comparison right now with last year will not provide a correct picture.

 

Q. Considering that India is such a large importer of edible oils, what effect the rupee depreciation has?

A. Rupee has depreciated by nearly 12–13% over the last year. Last year the rupee was 85-86 to the dollar, and now it is around 95. It means imports have become more expensive. Definitely, the edible oil prices have also gone up.

 

Q. How are global prices and availability of edible oil?

A. The overall availability of edible oil for food purposes is either decreasing or stagnant. On the other hand, the world demand is rising by 2% per annum.

 

We are consuming about 200 plus million tonnes of edible oil every year.  So, every year we need an additional 3 million to 4 million tonnes to feed the new mouths. The additional product is going for fuel rather than food. So, this definitely puts a pressure on the price of edible oil.

 

Moreover, the war between Iran and the US and between Russia and Ukraine, has also put pressure on the price.

 

Because of the Gulf War, freight rates have doubled. Earlier, for a soybean vessel, traders used to pay $50 to $60 per tonne for transport from Argentina or Brazil to India but now, it is $130 per tonne to $150 per tonne. Palm oil earlier was $25 per tonne to $30 per tonne. Now, it is $55 to $60 per tonne. The insurance costs have also nearly doubled. Small vessels are not available, which is also adding to the price rise. Hence, prices are not likely to cool down in the coming months.

 

Edited by Deepshikha Bhardwaj

 

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