India’s Growing Appetite for Palm Oil: Price Drop Reshapes Market Dynamics

06-May-2025 11:22 AM

India’s Growing Appetite for Palm Oil: Price Drop Reshapes Market Dynamics
★ A sharp decline in palm oil prices has made it cheaper than soybean oil, significantly shifting market preferences in India, the world’s largest importer of palm oil. Malaysian palm oil futures have dropped by nearly 10–15% since the start of 2025, reigniting interest among Indian importers who had earlier paused purchases due to high prices.
★ Indian millers, who had suspended palm oil imports amid soaring costs, are now placing fresh orders. In May, the CIF (Cost, Insurance, and Freight) price of crude palm oil delivered to India is around  $1,050 per tonne, while crude soybean oil is trading near $1,100 per tonne.
★ Back in December 2024, when the price gap between palm and soybean oil exceeded $100 per tonne, India’s palm oil imports slowed drastically. From December to March, India imported 1.57 million tonnes of palm oil—averaging just 385,000 tonnes per month. In contrast, during the 2023–24 season, India was importing around 750,000 tonnes per month on average.
★ Now, with prices weakening and inventories tightening, import volumes are expected to rise sharply:
Expected Imports in India
May: Over 500,000 tonnes
June: Around 600,000 tonnes
July–September: Possibly more than 700,000 tonnes per month
★ While the lower prices are attractive for importers, a rapid surge in palm oil imports could put pressure on the domestic edible oil industry, including processors and stockists. If imports rise too quickly, the industry may face renewed challenges related to pricing, margins, and inventory management.