PALMOILMAGAZINE, MUMBAI — India’s recent shift in edible oil consumption from palm oil to soybean oil is expected to be short-lived. According to Chandran Gunalan, Director of Policy and Strategy at the Council of Palm Oil Producing Countries (CPOPC), Indian consumer preferences are heavily influenced by short-term price dynamics rather than long-term structural changes.
Gunalan emphasized that major soybean oil–producing countries—particularly the United States and Brazil—are becoming increasingly aggressive in expanding biodiesel mandates. As a result, a larger portion of their soyoil supply will be absorbed domestically, tightening global export availability. “With more soybean oil being used for biodiesel, India’s shift to soyoil will not be permanent,” he said.
Import Duty Cuts Boost CPO Demand
India’s decision to reduce the crude palm oil (CPO) import duty from 20% to 10% on May 30 has significantly boosted the country’s CPO imports. Meanwhile, the import duty on refined palm oil products remains unchanged at 35.75%, widening the duty gap between crude and refined oils from 8.25% to 19.25%.
This policy shift has driven palm oil imports higher. India imported 3.4 million tons of palm oil between June and September—up 27% from last year. In September alone, imports surged to 824,761 tons, nearly doubling the volume recorded in 2024.
Known as one of the world’s most price-sensitive markets, India can shift demand between palm oil and soyoil with minimal price differences. “A spread of just US$10 can immediately swing demand,” said Gunalan, as quoted by Palmoilmagazine.com from Informist Media on Sunday (11/30/2025).
Between January and May, India’s palm oil imports fell to 1.6 million tons from 2.3 million tons the previous year, while soyoil imports rose to 1.8 million tons. This was largely driven by palm oil prices briefly exceeding soyoil and traders’ concerns over possible tariff hikes.
After the duty revision, however, palm oil inflows rebounded sharply, while imports of RBD palmolein plunged to 0 tons in September—down from 84,279 tons the year before.
Gunalan projects India’s palm oil imports to reach 4–5 million tons in 2026, while the 2025 volume is expected to remain lower at around 3 million tons.
Addressing concerns that Indonesia’s plan to implement B50 biodiesel might tighten palm oil supply, he assured that the impact on exports would be minimal. The additional palm oil needed for B50 is estimated at only 1–2 million tons.
“Indonesia’s stock levels remain strong. There is no indication that supply will tighten to the point of affecting exports,” he stressed.
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Global Palm Oil Production Outlook
Gunalan expects global palm oil production to reach around 82 million tons in 2025 and increase slightly to 82–83 million tons in 2026—well above global soybean oil output, projected at just 70.8 million tons.
Brazil raised its mandatory biodiesel blend from B14 to B15 in August, pushing domestic soyoil consumption from 5.5 million tons to 6.4 million tons. In the United States, biodiesel policies are also absorbing a significant portion of the country’s soybean oil output.
As of July 2025, Indonesia had produced roughly 30 million tons of palm oil and is on track to exceed 50 million tons by year-end. Malaysia remains confident of reaching its 2025 production target of 19.5 million tons.
Malaysia’s ending stocks are projected at around 2.5 million tons, while Indonesia’s are expected to remain stable due to robust domestic consumption.
Price Outlook: Stable Through 2025–2026
Palm oil prices in 2025 are projected to trade between US$900 and US$1,100 per ton, with the possibility of reaching US$1,200 if supply disruptions occur. For 2026, prices are expected to stay within the US$900–US$1,200 range.
Gunalan noted that prices are unlikely to return to the 2022 record highs. “Prices have now normalized, though they remain slightly above pre-COVID levels,” he said. (P2)
