A surge in the import prices of key edible oils and the prospect of a below-par monsoon adversely impacting domestic oilseeds production are likely to keep cooking oil prices at elevated levels in the next few months, industry experts said.
According to the Department of Consumer Affairs’ price monitoring cell, average retail prices of mustard, soybean and palm oils on Wednesday were Rs 193.54/kg, Rs 163.1/kg and Rs 147.37/kg, respectively. This represents an increase of 10.74%, 11.53% and 12.87% compared to prices a year ago.
“Higher freight, insurance costs, rupee depreciation, and oil-exporting countries diverting cooking oils for biofuel have impacted the landed cost,” B.V. Mehta, executive director of the Solvent Extractors Association (SEA), told FE. Mehta said the surge in import prices has been rather sharp since the West Asia war.
The current landed costs of edible oils (crude) at Mumbai ports according to SEA data for July 3 have increased by 11% (palm), 6% (soybean) and 20% (sunflower) to $1170/tonne, $1267/tonne and $1455/tonne respectively compared to prices prevailing a year ago.
Global Geopolitics
India imports around 57%-58% of its edible oil requirement. The country imports oils from Indonesia, Malaysia, Thailand, Ukraine, Russia and Argentina. Palm, soybean and sunflower account for the bulk of consumption, around 25-26 MT.
“Global market direction of edible oils over the coming months will largely depend on Indonesia’s B50 biodiesel programme, evolving US biofuel policies, crude oil prices, currency movements, weather developments and export policies of major producing countries,” Sudhakar
Desai, President, Indian Vegetable Oil Producers’ Association (IVOPA) said recently at a global event.
Indonesia’s B50 launched from July 1, 2026, would increase the country’s diesel fuel blend to 50% palm oil-based biodiesel and 50% conventional diesel, diverting around 14.6 MT of palm oil towards biodiesel. Indonesia is the biggest producer of palm oil in the world.
“After a disruption in supplies post-West Asia war, the supply has started to improve while prices remain elevated,” Arun Harne, chief business officer at Gokul Agro Resources, a leading processor of edible oils that sells under the brand name Vitalife, said.
Patchy Monsoon
Prospects of a deficit monsoon this season are likely to impact domestic production of oilseeds especially groundnut, soybean and mustard.
Oilseeds – soybean and groundnut – area is lagging sharply by 35% year-on-year due to scanty rainfall in the central India region especially in Gujarat and Madhya Pradesh last month.
Cooking oil imports in the 2024-25 oil year were valued at $18.3 billion.
Out of the total import of 16.01 million tonnes (MT) of cooking oils in the 2024-25 oil year, palm oil shipments accounted for over 47% while the rest was sunflower and soybean oils.
IVOPA has projected India’s edible oil imports in 2025-26 to reach 16.8 MT, comprising 8.5 MT (palm oil), 5.1 MT (soybean oil), 3 MT (sunflower oil), and around 0.2 MT of other variants of cooking oils.