El Niño could cut India’s edible oil production by 5–10%

India’s vegetable oil production could decline by 5–10% in the 2026/27 marketing year due to adverse weather conditions, including drought in some soybean-growing areas. Meanwhile, El Niño’s impact on oil palm yields in Southeast Asia could tighten global vegetable oil supplies in late 2026 and 2027.

This was stated by Mukesh Tailor, a commodity market analyst registered with India’s Securities and Exchange Board of India (SEBI), in an interview with NDTV Profit. According to Tailor, drought-like conditions in parts of Maharashtra, a key soybean-producing state, could weigh on output. However, adequate rainfall in the Malwa region of Madhya Pradesh is partly offsetting the weather risks.

El Niño’s impact on palm oil production typically emerges with a lag of 8–12 months, as prolonged moisture deficits disrupt oil palm fruit bunch development. As a result, lower output could affect global supplies in late 2026 and throughout 2027. Thomas Mielke, executive director of Oil World, also warned at the Globoil India 2026 conference that global vegetable oil prices could rise amid tighter supplies.

India remains the world’s largest vegetable oil importer. According to data cited by NDTV Profit, annual consumption exceeds 25 mln tons, while domestic production is estimated at around 9.6 mln tons in the 2025/26 season. In the MY 2024/25, vegetable oil imports exceeded 16 mln tons, with the import bill reaching $17.59 bln. Palm oil from Indonesia and Malaysia accounts for around 54–55% of import volumes.

The combination of potentially lower domestic production and tighter global supplies could increase India’s vegetable oil import costs in 2027. Additional risks include disruptions to sunflower oil shipments from the Black Sea region and lower South American soyoil exports, as highlighted by Mielke.

Tags: India, edible oils