India’s edible oil industry seeks government support amid Middle East crisis

The Solvent Extractors’ Association of India (SEA) has urged the government of India to provide urgent support to the edible oil industry due to the consequences of the Middle East conflict. In a memorandum, the association highlighted the sharp increase in import costs for vegetable oils, rising logistics expenses, and growing pressure on domestic prices.

According to SEA, since the outbreak of the conflict between the US and Iran, palm oil prices have risen by more than $105 per tonne, while soybean oil prices increased by $80 per tonne. In particular, the C&F price of RBD palmolein in Mumbai climbed from $1,115 to $1,235 per tonne, while crude palm oil prices rose from $1,150 to $1,255 per tonne.

Industry representatives noted that even after the ceasefire announcement, prices remain elevated due to structural problems in the global market. Key factors include higher freight costs, rising insurance premiums, and shortages of vessels used for edible oil transportation. Freight rates from Argentina to the Indian ports of Kandla and Mundra, for example, have nearly doubled to $140–145 per tonne.

Additional pressure comes from a shortage of smaller vessels traditionally used for palm oil shipments, forcing importers to rely on larger and more expensive carriers. At the same time, packaging materials such as polyethylene and polypropylene have reportedly become 50–60% more expensive, adding further strain to margins and retail prices.

The situation has been aggravated by the depreciation of the Indian rupee. Since late February, the currency has weakened by around 4.8%, from 91 to 95.4 rupees per US dollar, significantly increasing import costs and working capital requirements for companies. SEA warned that this is intensifying inflationary pressure on the domestic food market.

The association has called on the government to introduce freight subsidies for edible oil imports, grant priority berthing status for vessels carrying essential commodities, and expand support for oilmeal exports. Industry representatives stressed that timely policy measures are necessary to stabilize supplies, avoid shortages, and contain further price increases.

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