Stocks of vegetable oils in India fell to a five-year low due to reduced imports of palm oil

Vegetable oil stocks at Indian ports and pipelines fell to a five-year low of 1.35 million tonnes as of May 1, 2025, following a sharp decline in palm oil imports in April, which hit a four-year low, according to data from the Solvent Refiners Association of India (SEA). The last time stocks were lower was on May 1, 2020, when they were around 0.91 million tonnes.

India’s palm oil imports in April fell 24.29% from March to 321,446 tonnes, SEA said. The association’s executive director B.V. Mehta said the low stocks did not indicate a shortage of edible oils in the country as domestic production, particularly mustard seed processing, was continuing vigorously, ensuring adequate supplies. In addition, 60,000-70,000 tonnes of refined edible oils are imported from Nepal every month, which also affects the level of port stocks.

Low stocks may prompt India to increase imports of palm and soybean oil in the coming months, which, according to Reuters, will support Malaysian palm oil prices and soybean oil futures in the United States. At the same time, edible oil price inflation in India in April 2025, according to the Consumer Price Index (CPI), reached 17.4%, which was the sixth consecutive month of double-digit inflation – a rate not seen since March 2022, when the war between the Russian Federation and Ukraine began.

The high prices of edible oils are partly due to the cost of crude palm oil at Mumbai ports, which is around $1,100 per tonne, although prices have eased slightly since March. Last year, the price was below $1,000 per tonne at the same time. Another reason for the high retail prices is the reduced demand for oilseed meals from the livestock industry due to a surplus of DDGS (dry digestate with solubles), a by-product of ethanol production, which has increased due to the production of more than 5 billion liters of ethanol in India.

Mehta explained that processors earn income from the sale of both edible oils and animal meals. With the demand for meals, particularly rapeseed, rice bran and soybean, falling due to competition with DDGS, processors are having to compensate for the loss of margins with higher oil prices. This puts additional pressure on retail prices, making things difficult for consumers in a climate of high inflation.

Tags: soybean oil, India, palm oil, stocks