India is stockpiling soybean oil to secure cheap supplies

Indian buyers placed large orders for soybean oil from April to July 2026 in anticipation of rising palm oil prices.

During this period, traders purchased more than 150,000 tonnes of South American soybean oil per month, according to a December 1 report citing Aashish Acharya, vice president of Patanjali Foods, one of the country’s largest vegetable oil buyers.

He added that the order volume was driven by an average discount of $20-$30 per tonne for soybean oil compared to palm oil during this period. Soybean oil typically sells at a premium to palm oil.

The increase in orders from India also reflects market expectations that palm oil prices will rise due to plans by Indonesia, the world’s largest producer, to increase the share of palm oil in biofuels starting in the second half of 2026, the report states.

“This is a significant supply volume in the coming months, as the market anticipates a palm oil shortage next year due to reduced production and increased consumption following the implementation of the B50 standard in Indonesia,” said Mayur Toshniwal, president and head of sales at Emami Agrotech, an Indian company that processes vegetable oil and biodiesel.

According to Budiman Suwardi, head of treasury and markets at Prime EcoHarvest Commodities, Indian buyers have been making advance purchases of soybean oil in anticipation of Indonesia’s implementation of the B50 policy.

“If the Indonesian government suddenly decides to implement the B50 in the second half of next year, it could lead to higher palm oil prices due to reduced export supplies,” he said.

According to Anilkumar Bagani, head of research at Sunvin Group in Mumbai, traders are not only hedging against Indonesia’s biodiesel policy but also preparing for a potential shortage of sunflower oil supplies, as crop declines in the Black Sea region and Europe could lead to lower production this season.

According to Acharya, the cost of sunflower oil from the Black Sea region was $230-$250 per tonne higher than South American soybean oil over the same four-month period.

Despite this, palm oil is currently priced approximately $90-$100 per tonne lower than soybean oil, highlighting the price differential and encouraging cost-sensitive Indian traders to switch to palm oil in the near term, Acharya added.

Tags: soybean oil, India