Desai said domestic edible oil production is estimated at 9.6 million tonnes in the 2025-26 oil year (October-September), which covers only about 40 per cent of Indian needs, strengthening India’s structural dependence on imports of about 16.7 million tonnes. Imports are expected to include 8-8.5 million tonnes of palm oil, 5-5.5 million tonnes of soybean oil, 2.8-3 million tonnes of sunflower oil and about 200,000 tonnes of other oils, including zero-duty imports through Nepal.
Sudhakar Desai, president of the Indian Vegetable Oil Producers Association (IVPA) and CEO of Emami Agrotech Ltd, while addressing UOB’s Hian conference in Kuala Lumpur, said the global edible oil market has entered a phase of structural instability due to trade restructuring, biofuel mandate and supply tightness.
Speaking on “Navigating Structural Shifts in Global Edible Oils: Implications for India”, Desai said geopolitical realignment has altered global trade corridors, reducing arbitrage opportunities and increasing the transmission of energy prices, currency movements and policy shocks into edible oil markets.
“Small adjustments in duties, mandates or trade flows are now creating uneven price fluctuations across the supply chain,” he said.
Offering a global outlook, Desai said production of four major vegetable oils is estimated at 208.4 million tonnes in 2025-26, slightly higher year-on-year. While palm and rapeseed oil production is increasing, sunflower oil production remains constrained.
“This limited supply growth makes the global balance sensitive to weather and policy disruptions, keeping inter-oil competition intense and prices volatile,” he said, adding that sunflower oil remains at a premium.
Biofuel mandate has emerged as a major swing factor. Indonesia’s biodiesel program alone absorbs about 14 million tons of palm oil, while US biofuel policies continue to moderate soybean oil price expectations.
“Edible oils are increasingly serving as energy-linked strategic inputs rather than pure food commodities, driving up prices and strengthening the relationship with crude oil and the policy cycle,” Mr Desai said.
Turning to India, Desai said domestic edible oil production in the 2025-26 oil year (October-September) is estimated at 9.6 million tonnes, covering only about 40 per cent of Indian needs, strengthening India’s structural dependence on imports of about 16.7 million tonnes. Imports are expected to include 8-8.5 million tonnes of palm oil, 5-5.5 million tonnes of soybean oil, 2.8-3 million tonnes of sunflower oil and about 200,000 tonnes of other oils, including zero-duty imports through Nepal.
India’s import basket remains highly sensitive to inter-oil price differentials, particularly between palm and soybean oil.
“A US$50-60 per tonne change in spreads is enough to reallocate volumes extensively, highlighting the absence of stickiness at the wholesale oil level,” he said. Palm oil imports have already declined from 10 million tonnes to around 8 million tonnes in 2021-22, as sustained premiums and competition from soybean and sunflower oils have changed market share dynamics. He said refining margins are under pressure, which is hampering demand momentum.
On trade policy, Desai said the recently concluded FTAs and bilateral arrangements with partners such as the US, EU, Australia, UAE and SAFTA members have become an integral part of market pricing and sourcing decisions.
“These agreements now directly impact land cost structures, arbitrage flows and refining economics,” he said, adding that more details on potential tariff concessions or quota mechanisms for U.S. soybean oil would provide additional market clarity.
Sharing his price outlook, Desai estimated palm oil production in Malaysia at 19.9 million tonnes (compared with 20.2 million tonnes last year) and Indonesia at 51.8 million tonnes (compared with 51.2 million tonnes), with replanting progress slow in both countries. Shortage of supply in the near term may support prices till March 2026. However, sustained premium on soybean oil is expected to limit the consumption of palm and sunflower oil in India.
He said that in a market driven by policy shocks rather than traditional supply cycles, stable and predictable tariff and mandate frameworks are important to prevent unpredictable price transmission to consumers. He reiterated IVPA’s continued engagement with policymakers and global stakeholders to support balanced development in the edible oil value chain.
