India slashes vegetable oil imports as war dampens demand

India, the world’s largest importer of vegetable oils, is cutting purchases as the war in Iran drives up prices and triggers fuel shortages. The energy crunch is weighing heavily on the country’s vast food-service sector, significantly reducing demand for edible oils.

The month-long conflict in the Middle East has disrupted global energy supplies, causing fuel shortages across Asian economies. In India, limited availability of LPG cooking gas has forced restaurants and eateries — from Delhi to Mumbai and Bangalore — to scale back operations or switch to alternatives such as kerosene or firewood.

About 40% of India’s vegetable oil consumption comes from hotels, restaurants and catering services, making the sector highly sensitive to disruptions. The slowdown has led to a sharp drop in demand, particularly in urban areas. Industry estimates suggest monthly consumption could fall by 250,000–300,000 tons and decline further if the war continues and LPG supplies remain constrained.

Domestic edible oil prices have surged by up to 17% over the past month, driven by currency weakness, higher freight rates, and increased logistics costs. At the same time, import costs have risen by around 25%, further pressuring buyers and discouraging purchases.

India is the world’s largest buyer of palm, soybean, and sunflower oils, relying on imports for more than two-thirds of its needs. A prolonged demand slowdown could deal a significant blow to major exporters, particularly Indonesia and Malaysia.

Preliminary data indicate that India’s vegetable oil imports fell to about 1.2 million tons in March, down from 1.32 million tons in February. Amid high prices and uncertainty, more consumers are shifting to home cooking while avoiding stockpiling, keeping overall demand subdued.

Tags: sunflower oil, soybean oil, India, palm oil, imports, edible oils