India's Palm Oil Imports Recover, Remain Below Average by Amit Gupta, Kedia Advisory
India's palm oil imports increased by 7% in May from the previous month, recovering from a four-month low but remaining below typical levels as refiners favored competitively priced soyoil. The narrowing price advantage of palm oil encouraged higher purchases of soyoil, whose imports surged 37% during the month. Total vegetable oil imports reached a three-month high of 1.37 million tons, supported by stronger demand for both palm oil and soyoil. Lower-than-normal palm oil imports by the world's largest vegetable oil buyer could result in higher inventories in Indonesia and Malaysia, potentially putting pressure on global palm oil prices.
Key Highlights
- India's palm oil imports rose 7% in May to 549,356 tons from April.
- Palm oil imports remained below the historical monthly average despite the rebound.
- Soyoil imports surged 37% as refiners shifted to relatively cheaper alternatives.
- Total vegetable oil imports climbed 4.2% to a three-month high of 1.37 million tons.
- Lower Indian palm oil demand could increase inventories in Indonesia and Malaysia.
India's palm oil imports registered a modest recovery in May, rising 7% from the previous month to 549,356 metric tons. Despite the increase, imports remained below normal levels as refiners continued to favor soyoil after palm oil lost much of its traditional price advantage. The shift in buying patterns reflects changing economics in the edible oil market, where price competitiveness remains a key factor influencing import decisions.
The world's largest importer of vegetable oils typically relies heavily on palm oil due to its affordability. However, with palm oil prices becoming relatively less attractive, importers increased purchases of alternative edible oils. According to the Solvent Extractors' Association of India (SEA), soyoil imports jumped 37% in May to 493,854 tons, highlighting strong demand from refiners seeking cost-effective substitutes.
Meanwhile, sunflower oil imports declined sharply by nearly 32% to 295,726 tons. The increase in palm oil and soyoil shipments helped lift India's total vegetable oil imports by 4.2% from the previous month to 1.37 million tons, marking the highest monthly import level in three months.
Market participants are closely monitoring India's buying activity because of its significant influence on global vegetable oil markets. Lower-than-usual palm oil imports could lead to higher inventories in major producing nations such as Indonesia and Malaysia, potentially exerting downward pressure on benchmark Malaysian palm oil futures.
During the first seven months of the 2026/27 marketing year, which began in November, India's vegetable oil imports rose 12% year-on-year to 9.2 million tons. India continues to source most of its palm oil from Indonesia and Malaysia, while imports of soyoil and sunflower oil primarily originate from Argentina, Brazil, Russia, and Ukraine.
India's vegetable oil demand remains strong, but shifting price dynamics are encouraging refiners to diversify purchases, reducing reliance on palm oil and influencing global edible oil trade flows.
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