- Global prices, rising import costs keep Indian cooking oil elevated.
- Indonesia’s biofuel program diverts palm oil, tightening global supplies.
- Weak monsoon threatens domestic oilseed crops, increasing import reliance.
The sharp rise in global edible oil prices, coupled with concerns over a weaker-than-normal monsoon, is likely to keep cooking oil prices elevated in India over the coming months, according to industry experts. While global supply chains are gradually stabilising after recent geopolitical disruptions, higher import costs and uncertainty surrounding domestic oilseed production continue to pose challenges for one of the world’s largest edible oil consumers.
Import Costs Continue to Climb
India meets nearly 57-58 per cent of its edible oil demand through imports, making domestic prices highly sensitive to global market movements.
According to data from the Department of Consumer Affairs’ Price Monitoring Cell, the average retail prices of mustard, soybean and palm oil on Wednesday stood at Rs 193.54 per kg, Rs 163.10 per kg and Rs 147.37 per kg, respectively. Compared to a year ago, prices have increased by 10.74 per cent, 11.53 per cent and 12.87 per cent.
Speaking to Financial Express, B V Mehta, Executive Director of the Solvent Extractors’ Association (SEA), said higher freight charges, rising insurance costs, the depreciation of the rupee and the increasing diversion of edible oils towards biofuel production have all contributed to a sharp rise in import costs.
“The surge in import prices has been rather sharp since the West Asia war,” Mehta said.
SEA data shows that the landed prices of crude edible oils at Mumbai ports as of July 3 have risen significantly over the past year. Palm oil prices are up 11 per cent to $1,170 per tonne, soybean oil has increased 6 per cent to $1,267 per tonne, while sunflower oil has recorded the steepest rise of 20 per cent to $1,455 per tonne.
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Global Developments Keep Markets on Edge
Industry experts believe international developments will continue to determine the direction of edible oil prices in the months ahead.
Speaking recently at a global industry event, Sudhakar Desai, President of the Indian Vegetable Oil Producers’ Association (IVOPA), said the market outlook would largely depend on Indonesia’s B50 biodiesel programme, evolving US biofuel policies, crude oil prices, currency movements, weather conditions and export policies adopted by major producing nations.
Indonesia, the world’s largest palm oil producer, has implemented its B50 biodiesel programme from July 1, 2026. Under the programme, diesel will comprise a 50:50 blend of conventional fuel and palm oil-based biodiesel, diverting nearly 14.6 million tonnes of palm oil towards fuel production and tightening supplies for edible use.
Meanwhile, Arun Harne, Chief Business Officer at Gokul Agro Resources, told the news organisation that although supply disruptions witnessed after the West Asia conflict have started easing, edible oil prices remain elevated.
Patchy Monsoon Raises Domestic Concerns
Apart from global factors, weather remains another major source of concern.
Industry experts say prospects of a weaker monsoon could weigh on domestic oilseed production, particularly soybean, groundnut and mustard. Sowing of soybean and groundnut has already lagged by around 35 per cent year-on-year because of inadequate rainfall across key producing regions, especially Gujarat and Madhya Pradesh.
A lower domestic harvest could increase India’s dependence on imports at a time when global prices are already trading at elevated levels.
India’s Import Dependence Remains High
India imported 16.01 million tonnes of edible oils during the 2024-25 oil year, valued at approximately $18.3 billion. Palm oil accounted for more than 47 per cent of total shipments, with sunflower and soybean oil making up the remainder.
Looking ahead, IVOPA has projected India’s edible oil imports to increase to 16.8 million tonnes in 2025-26. This includes 8.5 million tonnes of palm oil, 5.1 million tonnes of soybean oil, 3 million tonnes of sunflower oil and around 0.2 million tonnes of other edible oil varieties.
With international prices remaining firm and monsoon uncertainty clouding domestic production prospects, industry experts believe cooking oil prices are likely to remain under pressure in the near term, leaving households to contend with higher grocery bills for some time.
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