India's Edible Oil Imports Drop to 4-Year Low, Impacting Global Markets

India, the world’s largest importer of vegetable oils, saw its edible oil imports plunge to a four-year low in February, depleting inventories to their lowest levels in over three years. According to the Solvent Extractors’ Association of India (SEA), the drop was led by significant declines in soyoil and sunflower oil imports, while palm oil imports saw a temporary rise. This ongoing trend is expected to drive up demand in the coming months, potentially boosting global prices for Malaysian palm oil and U.S. soyoil.

The latest data shows that India’s total vegetable oil imports fell by 12% to 899,565 metric tons—the lowest since February 2021. Soyoil imports alone dropped by 36%, while sunflower oil imports declined by 20.8%. At the same time, edible oil stocks fell 14% from the previous month, reaching just 1.87 million tons as of March 1. With domestic supplies tightening, experts anticipate that India may have to ramp up purchases soon to prevent further shortages.

India sources its palm oil primarily from Indonesia, Malaysia, and Thailand, while its soyoil and sunflower oil supplies come from Argentina, Brazil, Russia, and Ukraine. The drop in imports is reshaping market dynamics, with palm oil's share of India’s vegetable oil imports falling from 66% a year ago to just 43% in the first four months of the current marketing year. Analysts suggest that India’s import volumes are likely to recover in March as traders rush to rebuild stocks.

Looking ahead, the edible oil market remains volatile, with global supply chains, price fluctuations, and shifting trade patterns playing a critical role in determining future trends. As India prepares to increase imports, the impact on international markets could be significant, influencing pricing strategies and demand patterns across the agricultural sector.