PALMOILMAGAZINE, NEW DELHI — After five sluggish months, India’s demand for palm oil surged in April 2025, driven by lower prices compared to other vegetable oils and more favorable import margins, according to a report by Platts, part of S&P Global Commodity Insights.
As the world’s largest palm oil importer, India is showing a renewed preference for palm oil over alternatives like soybean oil. Currently, crude palm oil (CPO) is priced significantly lower than soybean oil, making it the preferred choice among local buyers.
“Import margins for palm oil are currently positive, unlike competing oils such as olein, sunflower oil, and soybean oil, which still face negative margins. As a result, Indian buyers are favoring palm oil,” a market source told Reuters.
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Another source added that Indian buyers are highly sensitive to pricing and profit margins. “Given the current favorable conditions, restocking is inevitable, especially since recent buying activity had been relatively low,” the source said.
Data from the Solvent Extractors’ Association of India showed that India’s palm oil imports rose by 13.7% to 424,599 metric tons in March, up from 373,549 metric tons in February. However, this still marks a 38% drop compared to the same period last year.
Global CPO prices have declined mainly due to rising production and stock levels in Malaysia, coupled with market anxiety over potential U.S. tariff measures. As a result, CPO prices dropped throughout April.
Third-month CPO futures on the Malaysian exchange fell by 10.55% in April to MYR 4,035/mt (approximately USD 919.55/mt) as of April 23.
Currently, palm oil is about USD 50/mt cheaper than soybean oil — a reversal from March, when soybean oil was USD 70–100/mt cheaper than palm oil. Physical CPO prices for May delivery to India’s West Coast stood at USD 1,065/mt on April 23, while June deliveries were offered at USD 1,050/mt. Platts assessed the CFR price at USD 1,055/mt, reflecting a 10.21% drop since early April.
Rising Palm Oil Production Pressures Prices
On the supply side, increased output in Malaysia — the world’s second-largest palm oil producer — is expected to continue exerting downward pressure on prices. Data from the Southern Peninsular Palm Oil Millers Association showed a 9.11% rise in production during April 1–20 compared to March, with oil extraction rates up 0.27% and fresh fruit bunch yields up 7.69%.
Indonesia, the top global exporter, is also reporting stable and strong supply. “Most of Indonesia’s palm oil exports are currently heading to India,” a market player noted.
Together, Indonesia and Malaysia account for roughly 85% of global palm oil supply.
China’s Demand Remains Weak
In contrast to India, China — the world’s second-largest palm oil importer — is showing little enthusiasm. “While vegetable oil stocks in China are low and basic restocking is ongoing, overall demand remains sluggish,” a trader said.
Another industry source confirmed that Chinese buyers remain cautious, purchasing only as needed without significant increases in import volumes.
While palm oil is regaining its competitive edge globally, especially in India, market dynamics will continue to be shaped by the responses of key buyers like China and potential shifts in international trade policy. (P2)
