Newsletter
If you’ve ever opened a packet of instant noodles, a packet of chips, or that 1-litre pouch of refined oil sitting in your kitchen, chances are you’ve eaten palm oil: the invisible ingredient that runs India’s cooking economy. But lately, India’s long love affair with palm oil seems to be cooling off.
For the first time in five years, palm oil imports have plunged to just about 6 lakh tonnes in October 2025; a steep fall that’s got both Indonesian and Malaysian exporters a little worried.
What’s going on? Well, it all comes down to price. Palm oil, which was once the cheap, go-to edible oil for Indian households and food processors, has suddenly become the expensive cousin. Over the past few months, its prices shot up relative to other soft oils like soyoil and sunflower oil. Refiners: the folks who decide which oil to import and blend did the math, and the verdict was clear: soyoil is cheaper, and it’s time to switch.
India’s palm oil imports dropped 16% month-on-month in September 2025 to about 8.3 lakh tonnes, the lowest since May and then slid further in October to around 6 lakh tonnes, a five-year low. In the same period, soyoil imports jumped 36% to over 5 lakh tonnes in September, the highest since July 2022, while sunflower oil imports crept up 6% to 2.7 lakh tonnes.
The overall edible oil basket shrank slightly down by 1% month-on-month in September and another 21% by October but the shift within that basket was massive. Soyoil now rules the roost, grabbing record volumes as refiners chase affordability. And it’s not just a minor tweak; in the 2024–25 marketing year, palm oil imports fell 16% to 7.56 million tonnes, while soyoil surged 62% to a record 5.56 million tonnes.
That’s a clear case of market share migration happening in real time.
The trigger? Argentina. In late September, Buenos Aires scrapped export taxes on soybeans and related products for a short window, making its soyoil dramatically cheaper. Indian refiners pounced, buying a record 3 lakh tonnes of soyoil in just two days; the biggest single purchase ever made in that short a time.
Combine that with comfortable domestic palm oil stockpiles (built up before the festival season) and it’s easy to see why importers took their foot off the palm oil pedal. Simply put, they had enough inventory and a cheaper substitute in hand.
Now, remember; India is the world’s largest importer of vegetable oils, and what it buys (or doesn’t buy) shakes up global markets. When India cuts down on palm oil, benchmark prices in Malaysia start to soften because stockpiles there rise.
On the flip side, soybean-growing giants like Argentina and Brazil enjoy a demand windfall, while U.S. soyoil futures get a nice little bump. Even China got a slice of the action this time as India imported around 11,000 tonnes of soyoil from there in September, the first such shipment in years. It’s a reminder that in global commodity markets, one nation’s kitchen choices can become another nation’s export strategy.
This isn’t just about market volatility; it’s also a peek into how sensitive India’s food supply chain is to global prices. Palm oil may dominate supermarket shelves, but it’s no longer as indispensable as it once was. Its share in India’s edible oil imports has fallen below 30%, that is the lowest in 14 years as more “soft oils” like soy and sunflower make their way into our plates.
Consumers don’t directly feel this shift overnight because much of the oil we buy is blended. But over time, these changes decide what farmers grow in South America, how much land is cleared in Southeast Asia, and how Indian refiners plan their next shipment.
And even though India has been trying to reduce its dependence through the National Mission on Edible Oils – Oil Palm (launched in 2021), local production remains tiny. Andhra Pradesh, Telangana, and Kerala together make up 98% of domestic palm oil output, but the country still relies heavily on imports for its 25-million-tonne edible oil appetite.
Until domestic cultivation scales up meaningfully, global price swings will keep dictating what lands on our kitchen shelves.
So the next time your grocery bill feels a little lighter (or heavier), remember, it’s not just about what you’re frying; it’s about what the world’s farmers, traders, and governments are pricing. India’s oil mix is changing, one shipment at a time, and every tweak in those numbers tells a story about how economics quietly shapes what we eat.
FAQs
Why did India’s palm oil imports fall in 2025?
India’s palm oil imports fell mainly because prices became higher than other edible oils. Refiners switched to cheaper options like soyoil, leading to a 16% monthly drop in September 2025 and a five-year low of 6 lakh tonnes in October.
How much palm oil did India import in 2025?
In the 2024–25 marketing year, India imported about 7.56 million tonnes of palm oil, down 16% from the previous year. This was one of the sharpest declines in recent years.
Which oils replaced palm oil in India’s imports?
Soyoil became the main alternative, with imports soaring 62% year-on-year to 5.56 million tonnes in 2024–25. Sunflower oil imports also rose slightly to around 2.7 lakh tonnes per month.
Why did refiners prefer soyoil over palm oil?
Soyoil turned cheaper after Argentina temporarily scrapped export taxes on soybeans and related products in September 2025. This made Indian refiners buy a record 3 lakh tonnes of soyoil in just two days.
Which countries supply palm oil and soyoil to India?
India buys most of its palm oil from Indonesia and Malaysia, while soyoil and sunflower oil come from Argentina, Brazil, Russia, and Ukraine. In 2025, India even imported 11,000 tonnes of soyoil from China for the first time in years.
How does India’s edible oil demand affect global markets?
As the world’s largest importer, India’s buying decisions impact global prices. Lower palm oil imports pressure Malaysian prices, while higher soyoil demand benefits exporters like Argentina and Brazil.
What is India doing to reduce its dependence on palm oil imports?
India launched the National Mission on Edible Oils – Oil Palm (NMEO-OP) in 2021 to increase domestic palm oil production and reduce import dependency.
Which Indian states produce palm oil?
Andhra Pradesh, Telangana, and Kerala together produce about 98% of India’s domestic palm oil output, though it still meets only a small share of total demand.
What is the current share of palm oil in India’s edible oil imports?
Palm oil now accounts for less than 30% of India’s total edible oil imports — its lowest share in 14 years — as soft oils like soy and sunflower dominate.
How does the change in edible oil imports affect consumers?
When refiners switch to cheaper oils like soyoil, it helps keep cooking oil prices stable for consumers. But long-term dependence on imports means prices in India still move with global trends.
