Sharp decline in India's palm oil purchases in 2024/25MY will continue to pressure vegetable oil prices in the near term

According to preliminary data from the industry association Solvent Extractors' Association of India (SEA), vegetable oil imports to India in the 2024/25 MY (ending in October 2025) reached 16.3 - 16.4 million tons, which is in line with the previous season, but palm oil supplies decreased significantly due to increased soybean oil supplies.

In the 2024/25 MY, palm oil imports to India decreased by 20% compared to the previous season from 9-9.2 million tons to a 5-year low of 7.58 million tons, sunflower oil - by 22% from 3.51 to 2.87-2.88 million tons, while soybean oil imports increased by 16% from 4.7 million tons to a record 5.47-5.56 million tons. The main reason for this reduction in supplies was that palm oil had been trading at a premium to other oils for several months, which forced Indian buyers to switch to cheaper soybean oil, as well as the Indian government's increase in the difference in duty between crude and refined oils (to 19.25%), which effectively stopped imports of refined palm oil (RBD Palmolein).

Palm oil prices fell below $1,000/t in October and traded at a discount of $150-200/t compared to soybean and sunflower oil prices, but this did not help increase supplies to India.

In October, India's total imports of edible oils decreased by 20.7% compared to September to 1.27 million tons, in particular palm oil - by 27.6% to the lowest level since May of 595 thousand tons (867 thousand tons in October 2024), soybean oil - by 17.1% to 417 thousand tons, and sunflower oil - by 6.4% to 255 thousand tons.

January palm oil quotes on the Bursa Malaysia exchange have been trading at 4,150 ringgit or $1,000/t for two weeks, and December soybean oil futures in Chicago are at $1,125/t (which is the same as last month), while prices for Black Sea sunflower oil have decreased by $50-60/t to $1,200-1,240/t FOB.

Shipping experts estimated that palm oil exports from Malaysia between November 1 and 15 fell by 10-15.5% compared to the previous month, confirming a further decline in demand and importers' expectations of lower prices.

In the November supply and demand report, USDA experts did not significantly change the global balance of vegetable oils compared to September. Thus, the forecast for global vegetable oil production in 2025/26 MY was left at 234.4 million tons, which will exceed the previous season's figure by 2%, in particular sunflower - 20.96 million tons (+4.4%), palm - 80.82 million tons (+2.4%), soybean - 70.57 million tons (+1.1%), and rapeseed - 35 million tons (+2.5%).