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Informist, Monday, Jul. 6, 2026

MUMBAI – The global vegetable oils industry is undergoing a change where newer developments are expected to govern the market, according to Sudhakar Desai, the president of the Indian Vegetable Oil Producers' Association.

"The global vegetable oil industry is entering a new phase where policy decisions, energy markets, climate developments and geopolitics are increasingly influencing production, trade flows and price formation," Desai said at the recently held 17th China International Conference on Oils and Oilseeds (CCOC-17) in Shanghai, China.

Malaysia's palm oil production is expected to reach 19.8 million tonnes, while Indonesian production is projected at 49.3 million tonnes, representing a combined decline of about 900,000 tonnes from the previous year. However, Indonesia is expected to divert around 14.6 million tonnes of palm oil towards biodiesel, assuming implementation of the B50 mandate from Jul. 1. This would translate into an additional 1.5-1.8 million tonnes of palm oil being absorbed by the biofuel sector compared with the previous year, significantly influencing global trade flows and supply availability, he said in his outlook for 2026, as per a release from the association.

Overall, production of the four major global vegetable oils is projected to increase by 3.1% to around 212.5 million tonnes this year while global consumption is expected to grow by 1.9% to nearly 211 million tonnes. "Although the global supply balance remains broadly comfortable, market direction will increasingly be shaped by policy developments and external macroeconomic factors," Desai said.

While traditional demand-supply fundamentals continue to be important for the vegetable oil market, price behaviour is increasingly being driven by macroeconomic developments and policy interventions, he observed.

Outlining the price outlook for the second half of the year, Desai said Bursa Malaysia Derivatives' crude palm oil futures are expected to trade within a range of 4,200-4,700 ringgits (nearly INR 98,000–INR 110,000) per tonne. He added that palm oil and soybean oil are likely to trade within a relatively narrow price spread.

"However, supported by favourable global sunflower seed plantings, sunflower oil is expected to lose its current premium of $150-$200 per tonne and normalise to a premium of around $50-$70 per tonne over soybean oil," he said.

India consumes nearly 25 million tonnes of edible oils annually, with imports meeting around 60% of domestic demand. Its imports of edible oil in 2025-26 (Nov–Oct) are likely to reach 16.8 million tonnes, comprising 8.5 million tonnes of palm oil, 5.1 million tonnes of soybean oil, 3.0 million tonnes of sunflower oil, and around 200,000 tonnes of other edible oils.

"The global vegetable oil industry is entering a more interconnected and dynamic phase where informed policymaking, innovation and international collaboration will play an increasingly important role in shaping future trade and investment opportunities across vegetable oils, oilseeds, deoiled cakes and other agricultural commodities, including rice, spices and aquatic products," Desai said.  End

US$1 = INR 95.46

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

Reported by Abhijit Doshi

Edited by Akul Nishant Akhoury

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