IVPA says sourcing decisions are increasingly driven by supply security as global market uncertainties intensify
India’s edible oil sector is entering a new phase where sourcing strategies are being shaped more by supply security than pricing dynamics. According to the Indian Vegetable Oil Producers’ Association (IVPA), a combination of climate challenges, geopolitical tensions and rising biofuel demand is expected to influence edible oil trade flows during 2026-27.
Speaking at the 24th International Conference BLACK SEA GRAIN.KYIV-2026, Bhavna Shah, Vice President, IVPA, said that India’s edible oil imports are likely to shift from traditional price-led purchasing decisions to supply-driven sourcing as global market conditions become increasingly complex.
Multiple Global Factors Influencing the Market
Shah identified three major forces that will influence the edible oil sector in the coming year: weak monsoon conditions, elevated crude oil prices, and strong global biofuel demand that is tightening edible oil availability.
Despite these pressures, she noted that India’s edible oil market remains relatively stable due to efficient supply chain management, strategic imports and timely policy interventions when required.
However, she cautioned that edible oil inflation could rise moderately due to a combination of weak monsoon forecasts, volatility in crude oil prices, fertilizer shortages, gas-linked production constraints and biofuel mandates that are reducing global palm oil availability.
India Remains a Key Global Demand Hub
According to Shah, India continues to serve as a critical destination for global edible oil supplies.
“India remains a prime destination for any surpluses. The country is seen as a sink that will absorb any kind of surplus wherever in the world it exists,” she said.
She emphasized that edible oil markets should no longer be viewed solely through the demand-supply lens. Instead, policymakers and industry stakeholders must recognize the growing interconnection between food, feed and fuel markets.
As biofuel production expands globally, edible oils are increasingly being used as feedstocks for fuel, making energy markets a major driver of edible oil prices. Rising fuel prices can now trigger almost immediate increases in global edible oil prices due to feedstock diversion.
Import Trends and Market Outlook
India’s edible oil imports have remained relatively stable in the range of 15 to 17 million metric tonnes annually. Imports in March 2026 increased by 11% year-on-year to 1.19 million tonnes, although the two-month average declined by 12% due to elevated prices.
For the 2025-26 oil year, edible oil imports are projected at approximately 16.5 million tonnes, while domestic production is expected to reach 9.6 million tonnes.
On the composition of imports, Shah said sunflower oil is expected to maintain resilient demand. However, supply disruptions in Argentina could affect soybean oil shipments, while palm oil imports are likely to remain strong because of favorable price competitiveness.
“The import basket will be palm-heavy. Palm retains its cost advantage for now,” she said.
At the same time, she noted that soybean oil and palm oil will increasingly compete for market share in India after April 2026, with Chinese soybean oil expected to emerge as a significant participant in the market.
Self-Reliance Initiatives Gain Momentum
India currently depends on imports for nearly 60% of its edible oil requirements, making it one of the world’s largest edible oil importers.
While import dependence remains high, the government has intensified efforts to boost domestic production through initiatives such as the National Mission on Oil Palm, the National Mission on Oilseeds, enhanced minimum support prices (MSP) and broader self-reliance programmes.
Together, these initiatives represent an investment commitment of approximately $2.5 billion, aimed at increasing domestic production, diversifying supply sources and reducing long-term import dependence.
Policy Support to Shape Future Market Trends
Shah noted that a maturing policy framework will increasingly influence import patterns and price movements as geopolitical uncertainties continue across global markets.
She credited the Government of India for taking decisive steps to manage market stability through calibrated policies, securing supplies, controlling inflationary pressures and ensuring uninterrupted availability despite global disruptions.
As climate risks, energy markets and geopolitical developments continue to intersect, India’s edible oil sector is expected to place greater emphasis on supply resilience, strategic sourcing and domestic production growth to ensure long-term food security and market stability.
