India’s agreement to cut or eliminate import duties on soybean oil from the United States may shift a portion of its current import basket away from Argentina and Brazil, BV Mehta, Executive Director, Solvent Extractors’ Association of India (SEA), said.
Speaking to FE, Mehta said, “Because of higher freight costs, importing soybean oil from the US is currently costlier by around $30–$40 per tonne compared to oils sourced from Argentina and Brazil.” He added that the duties to be imposed on oil sourced from the US would determine the extent of imports and how much they would displace existing suppliers.
Of the country’s annual soybean oil consumption of around 5.8 million tonne (MT), only about 1.8 MT is produced domestically, Mehta said. Currently, the effective import duty, including basic customs duty and cess, on crude edible oils such as palm, sunflower, and soybean is 16.5%, while the duty on refined oils is nearly 36%. The landed cost of crude soybean oil stands at $1,275 per tonne.
India’s soybean oil imports
India imports about 4 MT of soybean oil annually, while total edible oil shipments are around 16 MT, accounting for nearly 58% of the country’s annual cooking oil consumption.
Argentina and Brazil account for roughly 70% and 20% of India’s soybean oil imports respectively, while shipments from the US were only 0.2 MT, or about 5% of total imports during the January–November period of the 2024–25 oil year.
What do SEA estimates report?
According to SEA, the value of India’s edible oil imports in the 2024–25 oil year (November–October) rose 22% year-on-year to a record ₹1.61 lakh crore ($18.3 billion), while import volumes increased marginally to 16.01 MT.
Meanwhile, soybean oil futures on the Chicago Board of Trade hit a six-month high, driven by expectations that India will buy more after proposing to open parts of its agriculture market to cheaper US imports, Bloomberg reported.
On the inclusion of soybean oil and dried distillers’ grains (DDGS) in the India-US interim deal, the Soybean Processors Association of India (SOPA) said on Monday that the government must set up a robust monitoring mechanism to ensure imports do not indirectly depress domestic oilseed realisations for India’s 5 million soybean farmers or bypass existing stringent non-GMO (genetically modified organism) regulations.
SOPA added that the government’s decision to keep soybean, soymeal, and other genetically modified (GM) foods and feed products out of trade concessions would safeguard domestic agriculture — especially the soybean value chain — from subsidised international competition.
“India’s bilateral arrangements with partners such as the US, EU, Australia, UAE, and SAFTA members have become integral to market pricing and sourcing decisions. These agreements now directly influence landed cost structures, arbitrage flows, and refining economics,” said Sudhakar Desai, President, Indian Vegetable Oil Producers’ Association.
Desai added that under the India-US deal, a quota of 0.5 MT of corn (maize) DDGS has been included, which will benefit the poultry and aquaculture sectors; however, its impact on domestic soybean prices remains to be seen.