What caused India’s edible oil inventories to fall sharply in February?

India’s edible oil imports experienced a significant decline in February, reaching their lowest point in four years. 

This decrease was primarily driven by reduced imports of soyoil and sunflower oil, two major components of the edible oil market.

As a result of the lower import volumes, edible oil inventories in the country have also fallen to their lowest level in three years. 

This information was released on Tuesday by the Solvent Extractors’ Association of India, highlighting a potential impact on the edible oil market and related industries in India.

The recent decline in imports to India, the world’s largest consumer of vegetable oils, has resulted in a significant depletion of domestic stocks for the second consecutive month. 

This shortage is expected to compel India to increase its procurement of vegetable oils in the coming months. 

Also, this surge in demand will likely bolster the prices of Malaysian palm oil and US soyoil futures, impacting the global vegetable oil market.

February imports

India’s palm oil imports in February increased to 373,549 metric tons, a 35.7% rise from January, according to a statement released by the Solvent Extractors’ Association of India (SEA).

India’s dependence on palm oil imports remained substantial throughout the marketing year ending in October 2024. 

The SEA reported that the country imported an average of over 750,000 tons of palm oil per month during this period. 

This consistent demand for palm oil highlights its significance as a key ingredient in various food and industrial products within India. 

Additionally, the SEA reported a significant decline in the imports of vegetable oils during February. 

Specifically, soyoil imports experienced a sharp drop of 36%, reaching 283,737 tons. 

Similarly, sunflower oil imports also decreased, falling by 20.8% to 228,275 tons. 

These figures highlight a notable reduction in the overall import of these two major vegetable oils in the Indian market during the given period.

The country’s total vegetable oil imports in February 2023 decreased 12% to 899,565 tons, the lowest since February 2021, due to lower shipments of soyoil and sunflower oil, according to the SEA’s statement.

Falling stocks

India’s edible oil stocks have plummeted 14% in the past month, reaching a three-year low of 1.87 million tons on March 1, the data showed.

India’s palm oil imports primarily originate from Indonesia and Malaysia, with additional imports from Thailand. 

These countries are major producers of palm oil, and their proximity to India makes them ideal suppliers. 

Soyoil, another major vegetable oil import for India, is sourced mainly from Argentina and Brazil, both significant producers of soybeans. 

Meanwhile, sunflower oil is primarily sourced from Russia and Ukraine, known for their substantial sunflower seed production.

These import patterns highlight India’s dependence on a global network of suppliers to meet its vegetable oil demands. 

This reliance can expose India to price fluctuations and supply disruptions in the global market, especially due to factors like weather conditions, political instability, and trade restrictions.

The SEA reported that palm oil’s share of total vegetable oil imports decreased significantly from 66% a year ago to 43% in the first four months of the current marketing year, ending in October 2025.

“The rapid depletion of stocks is expected to drive increased purchases, particularly of palm oil,” SEA said.

Over the past few weeks, crude palm oil prices have strengthened slightly relative to landed costs in the Indian market. However, weak price competitiveness in the global market may limit Indian palm oil imports in the near term.