India, the world’s largest buyer of vegetable oils, has drastically reduced its palm oil imports, a move that is expected to exert downward pressure on Malaysian palm oil prices while providing a boost to U.S. soyoil futures.
In january 2025, palm oil imports into india fell by 45%, reaching only 275,241 metric tonnes, marking the lowest monthly import figure since march 2011, according to the Solvent Extractors’ Association of india (SEA). This decline is particularly significant considering that india had averaged over 750,000 tonnes of monthly palm oil imports throughout the marketing year that ended in october 2024.
Historically, palm oil has been traded at a discount compared to other vegetable oils such as soyoil and sunflower oil, making it a preferred option for many buyers, especially in India. However, with stocks of palm oil falling significantly, its prices have now surged above those of its competitors, whose supplies remain more abundant.
This shift in the global vegetable oil market is likely to benefit U.S. soyoil futures, as the reduced palm oil imports from india open up space for alternative oils like soyoil to capture market share. The U.S., a major producer of soyoil, could see increased demand, which may support its futures prices in the coming months.
As India’s palm oil imports continue to decline, market analysts will be closely monitoring the effects on both palm oil and competing vegetable oils, particularly in terms of price dynamics and global supply-demand balances.
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