India's Edible Oil Imports Slump 30% in June as Palm-Soy Price Gap Narrows

India's edible oil imports in June 2026 dropped to 11.11 lakh tonne (lt), a steep 30% decline from 15.97 lt recorded in June 2025, according to data released by the Solvent Extractors' Association of India (SEA). The monthly figure also represents a significant pullback from recent elevated import levels.

Palm oil shipments led the slide, falling to 4.87 lt in June 2026 from 5.46 lt in May 2026 and 9.52 lt in June 2025 — a collapse of nearly half compared with the same month last year. Soybean oil imports also retreated, dropping to 3.80 lt in June 2026 from 4.93 lt in May 2026.

SEA Executive Director BV Mehta attributed the pullback primarily to the near-disappearance of palm oil's traditional price advantage over soft oils such as soybean oil, with the discount narrowing to under $50 per tonne — a level that removes the economic incentive for Indian buyers to favour palm.

The slump in Indian buying is not an isolated demand-side story — it reflects a structural shift in global vegetable oil markets, Mehta said. Simultaneous biofuel mandates introduced by Indonesia, Malaysia and the United States are diverting millions of tonnes of vegetable oils from food supply chains into fuel production, tightening global availability and driving up spot prices.

This supply squeeze has narrowed the price spread between palm oil and softer oils, removing the competitive edge that palm traditionally holds in price-sensitive markets like India. The effect has cascaded down to Indian import volumes, with buyers delaying or scaling back purchases.

A year-on-year price comparison underscores the inflationary pressure: crude palm oil (CPO) prices rose 17%, RBD palmolein climbed 18%, soybean oil gained 14%, and sunflower oil surged 19% compared with June 2025. Adding to the cost burden, the Indian rupee depreciated by over 11% in the past year — a development Mehta described as a cause of concern for importers and refiners.

Despite June's sharp monthly correction, the overall trajectory for oil year 2025-26 remains one of higher import volumes. India's cumulative edible oil imports for November 2025 through June 2026 stood at 103.88 lt, compared with 97.29 lt in the corresponding eight months of the previous oil year — a 7% increase year-on-year.

Crude palm oil remained the largest imported category at 49.42 lt during the eight-month period, followed by crude and refined soybean oil at 32.73 lt, and crude and refined sunflower oil at 20.94 lt.

On the sourcing front:

• Malaysia supplied 19.81 lt of palm oil, of which 19.58 lt was CPO
• Indonesia exported 19.04 lt of palm oil to India, including 18.79 lt of CPO
• Argentina shipped 18.54 lt of crude soybean oil and 4.85 lt of sunflower oil
• Russia supplied 48,650 tonnes of crude soybean oil and 9.88 lt of sunflower oil

Refined edible oil imports from Nepal continued at notable volumes during the oil year, drawing industry attention. Nepal exported approximately 3.38 lt of refined oils to India during November 2025–April 2026, comprising 2.97 lt of refined soybean oil, 19,911 tonne of refined sunflower oil, 18,295 tonne of RBD palmolein, and 3,081 tonne of rapeseed oil.

Shipments continued in subsequent months: Nepal exported an estimated 54,000 tonne of refined oils to India in May 2026 and 32,000 tonne in June 2026, primarily refined soybean oil with smaller quantities of sunflower oil and RBD palmolein.

Nepal's exports benefit from nil import duty under the South Asian Free Trade Area (SAFTA) agreement, giving Nepali refined oil a structural price advantage over direct imports by Indian refiners — a dynamic that SEA has flagged as a growing concern for the domestic refining industry.

The shift in India's own import mix reinforces this trend: refined oil's share of total imports dropped sharply to just 4% in the current eight-month period from 15% a year ago, while crude oil imports rose to 96% from 85% — largely on account of higher crude palm oil inflows.

The convergence of higher global edible oil prices, a narrowing palm-soft oil price spread, and a weakening rupee creates a challenging operating environment for Indian edible oil importers and refiners heading into the second half of oil year 2025-26.

With CPO, palmolein, soybean oil and sunflower oil all posting double-digit price gains over the past year — and the rupee having depreciated by over 11% — the landed cost of imported oils has risen materially. Indian processors who depend on affordable raw material imports face margin pressure that could eventually filter through to retail prices.

Mehta noted that India's sourcing pattern remains diversified across suppliers including Thailand, Brazil, Ukraine, China, Nepal, the UAE and other countries, which offers some resilience. However, the structural pull of biofuel mandates in key exporting nations suggests that global vegetable oil price pressure is unlikely to ease quickly.