India’s soyoil imports are projected to hit a record 5.5 million tons in 2024-25, up 60% from last year, as refiners shift from palm oil due to unusual price dynamics, Indonesia’s B40 biodiesel mandate, and the Russia-Ukraine conflict disrupting sunflower oil supplies. Competitive pricing, duty-free imports from Nepal, and tight palm oil availability have made soyoil the preferred option. This shift is reshaping consumption patterns, with households, eateries, and refiners increasingly turning to soy oil-based products.
India’s soyoil imports are expected to jump 60% year-on-year to a record high in 2024-25, as refiners turn to the cheaper option over palm oil, whose shipments are set to fall to a five-year low, according to six dealers cited by Reuters. For the 2024-25 marketing year ending in October, India’s soyoil imports are expected to rise sharply to 5.5 million metric tons from 3.44 million tons a year earlier, according to dealer estimates.
According to Bhavna S. Shah, Deputy CEO, N K Proteins Pvt. Ltd, “The surge was primarily driven by the unusual price dynamics in the vegetable oils complex. Palm oil, which typically trades at a discount, remained at elevated levels, making soyoil comparatively competitive. This price inversion encouraged refiners and buyers to pivot toward soyoil, resulting in record imports.”
Rohit Bangera, Technology & Business Development Manager – MEIA at Novonesis, provided other reasons for the surge, as he said, “Indonesia’s biodiesel blending mandate of B40 and Russia-Ukraine crisis, made soy oil more appealing to price-sensitive Indian buyers.”
The Russia-Ukraine conflict has severely disrupted global sunflower oil exports, as the two countries together produced over 70% of the world’s supply. This disruption has sent cooking oil prices soaring, forcing food companies to scramble for alternatives. Rising demand has driven palm oil prices higher, with significant implications for global markets, making essential cooking oil less affordable for many and creating pressure on refiners and importers.
Indonesia rolled out its mandatory biodiesel 40 (B40) program in January 2025, raising the blending requirement of diesel with fatty acid methyl ester (FAME) derived from palm oil from B35 to B40. While aimed at cutting fossil fuel imports, the program has tightened domestic palm oil supplies. Together, the twin pressures of the Russia-Ukraine war and Indonesia’s biofuel push are reshaping global edible oil trade flows—making soyoil the preferred choice for India’s refiners in 2024-25.
Rohit noted that global soy oil production is expected to reach around 68.1 million tons in 2025, supported by strong demand from countries like India due to competitive pricing. He highlighted that duty-free imports from Nepal under the South Asian Free Trade Agreement have further accelerated India’s soy oil uptake. Meanwhile, palm oil continues to face tight supply conditions, marking a notable shift in India’s import dynamics as soy oil takes a larger share of the market.
Bhavna added, “When palm needs the market share back with B50 getting into a delayed phase, it might be possible for palm to become competitive versus soya oil, pricing itself accordingly. This would mean Indian consuming segment will over a period of time develop the ability to quickly switch around the oils and demand is price elastic.”
Changing consumption dynamics
As there has been an increase in the prices of palm oil compared with soy oil, consumers often notice higher costs in packaged foods and cooking oils. Price-sensitive households may respond by turning to soy oil-based products in smaller pack sizes to manage daily expenses. Restaurants and small eateries, on the other hand, frequently adjust their usage by mixing oils or altering menus to balance costs.
For refiners and food processors, higher palm oil prices make soy oil the more practical and economical alternative. This has led to a surge in soy oil imports as companies reconfigure sourcing strategies. Bulk buyers hedge risks by securing larger volumes in advance, while palm oil imports decline until prices return to a more competitive level. The shift reflects broader adjustments across the supply chain, where both consumer behavior and industrial demand continue to shape India’s edible oil market.
Import outlook
The major share of edible oil imports in India is comprised of palm oil followed by soybean and sunflower oil. The 5-year CAGR of edible oil imports is 12%, with soya oil showing a rising CAGR of 13% compared to 10% for palm oil. The top ten import markets of India in edible oil include Indonesia, Malaysia, Argentina, Russia, Ukraine, Thailand, Brazil, Singapore, Romania and the Netherlands.
Conclusion
India’s sharp pivot towards soyoil highlights how global disruptions and domestic price sensitivities are reshaping edible oil trade flows. While palm oil remains the largest share of imports, its reduced competitiveness has opened space for soyoil to expand rapidly. Going forward, India’s edible oil market is likely to stay fluid, with refiners, food processors, and consumers adapting swiftly to price shifts and supply pressures.
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FAQs
Why is soyoil demand rising in India?
Soyoil demand is rising due to its competitive pricing compared to palm oil, supply disruptions of sunflower oil, and Indonesia’s biodiesel policy reducing palm oil availability.
Is soyoil healthier than palm oil?
Yes, soyoil is generally considered healthier than palm oil as it has more unsaturated fats and omega-3 fatty acids, making it a preferred option for cooking and packaged foods.
How does the price of soyoil compare with palm oil?
Soyoil has recently become cheaper than palm oil because of unusual price dynamics, making it more attractive for households, eateries, and refiners.
Will soyoil prices stay low in India?
Prices may fluctuate depending on global supply, biofuel mandates, and geopolitical factors. However, soyoil is currently expected to stay competitive against palm oil in the near term.
Which oil is better for daily cooking—soyoil or palm oil?
For daily cooking, soyoil is widely chosen due to its lighter taste, versatility, and health profile, while palm oil is mainly used in processed foods and frying because of its stability at high heat.
