India makes long-term soyabean purchases to secure cheap supply

Traders had locked in more than 150,000 tonnes/month of South American soyabean oil in the period, Aashish Acharya, vice president at Patanjali Foods, one of the country’s top vegetable oil buyers, was quoted as saying in the 1 December report.

The volume of orders was driven by soyabean oil’s average US$20-30/tonne discount to palm during that period, he added. Soyabean oil typically trades at a premium to palm oil.

Increased Indian orders also reflected market expectations that palm prices would increase due to top global producer Indonesia’s plans to blend more palm oil into biofuel starting in the second half of 2026, the report said.

“This is a considerably huge coverage in the forward months as 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 Indian vegetable oil and biodiesel processor Emami Agrotech.

Indian buyers had been making forward purchases of soyabean oil in anticipation of Indonesia’s B50 policy, Budiman Suwardi, head of treasury and markets at Prime EcoHarvest Commodities, was quoted as saying.

“If Indonesia’s government suddenly pushed for the B50 to be implemented in the second half of next year, it might push palm prices higher due to lack of supply for exports,” he said.

Alongside hedging against Indonesia’s biodiesel policy, traders are also bracing for potentially tighter sunflower oil supplies as reduced Black Sea and European crops threaten to curb output this season, according to Anilkumar Bagani, head of research at Mumbai-based Sunvin Group.

Sunflower oil shipments from the Black Sea region were priced US$230-US$250/tonne higher than South American soyabean oil for delivery in the four-month period, Acharya said.

Despite this, palm oil currently remained about US$90–US$100/tonne cheaper than soyabean oil, underscoring a pricing divergence and prompting cost-sensitive Indian traders to shift toward palm in the near-term, Acharya added.

Tags: soyabean oil, exports, Indonesia, prices, India, palm oil, biofuel