Soybean oil imports to see sharp jump during festive season in India: SEA President

India is set to experience a significant surge in soybean oil imports this August, potentially reaching a record 6.2 lakh tonnes, according to Sanjeev Asthana, President of the Solvent Extractors’ Association of India (SEA). In his monthly letter to members, Asthana highlighted that this figure would represent a nearly 46 per cent increase over the current marketing year's monthly average of 4.25 lakh tonnes. The rise is being driven by a combination of competitive international pricing, robust domestic demand ahead of the festive season, and supply disruptions affecting sunflower oil due to the ongoing Russia-Ukraine conflict.

As sunflower oil supplies remain unstable, Indian refiners are increasingly turning to soybean oil as the preferred alternative to meet market requirements. While this surge addresses immediate domestic needs, Asthana raised concerns regarding the sustainability of relying on imports while domestic soybean production faces uncertainties linked to weather patterns. As of August 14, total kharif oilseed acreage in India stood at 184.46 lakh hectares, slightly lower than the 185.36 lakh hectares reported during the same period last year.

Specific attention is being drawn to the decline in soybean acreage, which fell to 120.84 lakh hectares from 122.61 lakh hectares in the previous season. Factors such as the El Niño climate phenomenon have complicated the planting window, shifting focus toward crop conditions, expected yields, and ultimate returns for farmers. The industry is now questioning whether India can successfully transition from relying on heavy imports to establishing a stronger, more balanced domestic supply chain for oilseeds and edible oils in the 2026-27 period.

Trade data for April-May 2026 indicates mixed results in the sector: while the volume of edible oil exports declined by approximately 16 per cent, the total export value increased by nearly 2 per cent to ₹720.85 crore, reflecting better value realization. Concurrently, imports of oilseeds surged to 4.31 lakh tonnes, with soybean seeds accounting for 4.13 lakh tonnes of this total. This spike highlights an urgent need to enhance domestic productivity and ensure a steady supply of high-quality seeds to mitigate reliance on international markets.

Finally, the Reserve Bank of India has noted the growing global diversion of vegetable oils, such as palm oil, from food markets to biofuel production. This shift poses a risk of tightening global export availability and maintaining structurally firm prices, which directly impacts India’s import bill and food inflation. As one of the world's largest edible oil importers, India remains particularly sensitive to these international market dynamics, making the management of domestic production and import strategies increasingly critical for the coming months.