India’s Palm Oil Imports Rise: Key Market Insights

India lifted its palm oil imports in November, drawing attention from traders and oil-refining companies. Imports rose to about 630,000 metric tonnes, a 4.6% month-on-month increase compared to October. This came even as purchases of soy oil and sunflower oil dropped sharply during that month. The shift back to palm oil underlines changing preferences in the edible oil market. What does this change imply for demand, prices and imports going forward?

Why Did Palm Oil Imports Go Up Suddenly?

Palm oil became more attractive because its global price fell relative to soy oil and sunflower oil. Dealers noted that refiners reacted quickly to the cheaper palm oil rates and reduced imports of costlier oils. Soy oil imports fell to about 400,000 tonnes, while sunflower oil imports dropped to roughly 145,000 tonnes in November. This shift suggests refiners favoured palm oil for cost efficiency.

India remains the largest buyer of global edible oils. The recent shift points to demand for affordable oils, especially for bulk and industrial use. Lower palm oil prices plus high edible oil costs have nudged buyers toward palm oil again. As global supply remains uneven, with production growth slowing, imports by major buyers like India have a big effect on international trends.

Given the increase in imports, what does this mean for price stability and supply chains?

What Do Higher Imports Mean For The Price And Supply Balance?

Higher Indian demand can help reduce global stocks held by main producers such as Indonesia and Malaysia. This may support benchmark palm oil prices on futures markets, which often react to demand-supply balance and big-importer activity.

But global production also shapes prospects. Estimates show worldwide palm oil production in 2025–26 may rise to around 80.1 million tonnes, up 1.8% year-on-year, largely due to increased output in Indonesia. This increase could ease global tightness and keep prices in check if demand does not rise in the same manner.

Continuous imports might be regarded as a method to secure continuity of supply and to eliminate demand load on the price of edible oil in India on the part of both refiners and importers. However, any increase in international supply or other local production, e.g. weather changes or regulatory changes, can quickly affect demand and supply.

What To Watch Next?

One key factor is global production trends. If Indonesia and Malaysia ramp up output further, global supply could exceed demand growth. That would ease price pressure even if India imports heavily. Monitoring monthly production outlooks helps gauge supply-side risk.

Another is the demand for rival oils. If soy oil or sunflower oil prices drop or if consumption patterns shift, refiners may rotate back, reducing palm oil demand again. Watch global oil-seed supply and harvest data for signals.

The domestic policy and taxation are also factors. What traders purchase is determined by import duties, trade policy or duty-free quotas. Any alteration can cause the demand to change quickly across oil types.

Lastly, follow edible oil consumption and inflation and consumer demand trends in India. When the demand is high and the price of palm oil is competitive, the refiners might still purchase in high numbers, and the import of palm oil may be high. However, light demand or high stock may also drive the imports and reduce price support.

With November imports at 630,000 tonnes and global supply dynamics shifting, will palm oil remain the top import preference, or will demand shift back toward soy oil and sunflower oil in the coming months?

Sources:

Business Standard
The Economic Times
UkrAgroConsult