Import of edible oils in India to become costlier due to rising global market prices
20-Jun-2025 04:55 PM
Mumbai. Despite the Indian government's recent move to reduce the basic import duty on crude palm oil, soybean oil, and sunflower oil from 20 percent to 10 percent on May 30, 2025, the rising prices in the global market are expected to offset the intended benefits of this decision.
Although many traders responded to the duty cut by lowering the maximum retail price (MRP) and price to distributors (PTD) of their branded edible oils, the continued surge in international prices is making imports more expensive and narrowing the advantage of the duty relief.
Since the announcement of the duty reduction, the Free on Board (FOB) price of crude soybean oil has jumped by $61 per tonne, while crude palm oil has risen by $35 per tonne.
Specifically, the FOB cost of crude soybean oil imported at Kandla port climbed from $1001 per tonne on May 30 to $1062 per tonne by June 18. Similarly, the import cost of crude palm oil increased from $995 to $1030 per tonne during the same period.
Industry analysts attribute the rise in global edible oil prices to the Iran-Israel conflict, which has pushed up crude petroleum prices.
As a result, the demand for edible oils in biofuel production has surged, contributing to the global price increase. Additionally, higher soybean oil prices in the US have driven up crude palm oil futures in Malaysia.
Data from the Department of Consumer Affairs indicates that after the import duty cut, the retail prices of soybean oil, palm oil, sunflower oil, and vanaspati (vegetable ghee) declined only slightly—ranging from 0.4 to 2.1 percent over the past 20 days.
In contrast, the prices of groundnut oil and mustard oil—whose imports are minimal and largely influenced by domestic factors—rose by 0.4 percent each.
During the same 20-day period, wholesale prices of groundnut oil remained mostly stable, while mustard oil saw a 1 percent increase.
On the other hand, wholesale prices of soybean oil, palm oil, sunflower oil, and vanaspati declined between 0.5 and 2.4 percent. However, if the global market trend continues, Indian refining and processing units may find it increasingly difficult to maintain lower prices.