Signs of Increasing Palm Oil Demand in India After Five Months of Sluggish Imports
01-May-2025 05:58 PM
Mumbai. After nearly five months of subdued activity, India is now showing renewed interest in palm oil imports due to softening global prices, especially from Malaysia. Between November 2024 and March 2025, palm oil imports in India were significantly below the normal average, largely because palm oil was priced higher than soybean and sunflower oil.
However, in April, palm oil prices declined, sparking a rebound in interest from Indian importers. According to industry and trade analysts, this price drop has been fueled by rising palm oil production and stock levels in Malaysia and changing dynamics in the U.S. tariff policies, which are influencing the broader edible oil market.
Until March 2025, soybean oil was $70 to $100 per tonne cheaper than palm oil. But the trend has now reversed — palm oil is currently priced $50 per tonne lower than soybean oil, improving the import margins for Indian refiners.
As a result, purchasing activity has started picking up, though import margins for refined oils like palmolein, soybean, and sunflower oil still remain negative.
India's palm oil imports in March 2025 rose 13.7% to 4.25 lakh tonnes compared to February, although still 38% lower than March 2024 levels. Industry sources anticipate that April imports will surpass March figures, with expectations of further increases in May and June if current pricing trends continue.
Futures contracts for palm oil have fallen by 12% so far in 2025. As of April 23, the export offer price for crude palm oil (CPO) from Malaysia was around $1,000 per tonne, which dipped slightly to $995 per tonne the next day.
Analysts predict that if prices remain favorable, global exports of palm oil could rise to 25 million tonnes by September 2025, driven largely by demand from China and India, the world's two largest importers. India primarily sources palm oil from Indonesia, Malaysia, and Thailand.
During the 2023–24 marketing season, India averaged 7.5 lakh tonnes of palm oil imports per month. This figure significantly dropped in the current season, with less than 4 lakh tonnes imported in both January and February 2025, and March imports also falling below the 5-lakh-tonne mark.
Consequently, domestic palm oil stocks have been depleted, prompting expectations of higher import volumes in the coming months.