India makes forward soy oil purchases amid expected tightening in global vegetable oil markets

Indian importers have booked unusually large forward volumes of South American soybean oil for April to July 2026, seeking to lock in relatively low prices ahead of anticipated tightening in global vegetable oil markets. Traders secured more than 150,000 tons for each of the four months, according to Aashish Acharya, vice president at Patanjali Foods, who said the buying was driven by soybean oil’s atypical $20–$30 a ton discount to palm oil during that period.

The move reflects expectations that palm oil prices could rise as Indonesia prepares to expand its biodiesel mandate from 40% to 50% in the second half of 2026. Industry executives say the shift would divert more palm oil toward domestic fuel blending, reducing exportable supplies. “The market is sensing palm shortages next year due to lesser production and more usage when B50 in Indonesia is rolled out,” said Mayur Toshniwal, president and head of trading at Emami Agrotech.

Market participants also cite additional risks in competing oilseed markets. Poorer Black Sea and European sunflower crops may limit global sunflower oil availability, said Anilkumar Bagani, head of research at Sunvin Group. Sunflower shipments from the Black Sea region are currently priced $230–$250 a ton above South American soybean oil for the April–July window, Acharya said.

Despite the forward buying, palm oil remains $90–$100 a ton cheaper than soybean oil in the spot market, leading Indian buyers to favor palm for near-term deliveries. Acharya noted that some importers have recently canceled soybean oil cargoes of 25,000–35,000 tons because domestic prices have fallen by about $50 a ton. Trading firms report that overall soybean oil demand remains subdued despite the winter months, when consumers typically prefer soy oil due to the tendency of palm oil to solidify in colder weather.

Source: Bloomberg