Soyabean oil remains more attractive to Indian buyers despite the fall in palm oil prices over the past month, according to Sanjeev Asthana, President of Solvent Extractors’ Association of India (SEA).
In his monthly letter to the SEA members on Friday, he said palm oil imports were the lowest in January 2025 in the last 13 years, amounting to only 2.75 lakh tonnes (lt) when compared to 7.80 lt in January 2024.
Stating that palm oil’s market share is declining in India, he said consumers are increasingly switching to lower-priced South American soyabean oil. Malaysian palm oil exports have also decreased due to tightening export supplies.
The global demand for soya oil has surged due to significant price discounts, and the response to attractive soyabean oil prices has eased the tightness in palm oil, he said.
SEA data
Though the price of palm oil has dropped by $80-100 a tonne over the past month, soya oil still remains more attractive to buyers compared to palm oil, he said.
Data compiled by SEA showed that the CIF price of RBD palmolein declined to $1,126 a tonne in January from $1,236 in December, and that of crude palm oil (CPO) decreased to $1,170 in January from $1,270in December.
Meanwhile, the CIF price of crude soyabean oil declined from $1,123 a tonne in December to $1,118 in January.
Total palm oil imports (including CPO and RBD palmolein) decreased to 16.17 lt in the first quarter of the oil year 2024-25 (November to October) against 25.46 lt in the corresponding period of 2023-24.
Ethanol focus hurting
Soyabean oil import jumped to 12.7 lt during November-January of the oil year 2024-25 from 4.91 lt in the corresponding period of the previous oil year.
On oilmeal exports, he said the total export of oilmeals stood at 36 lt during the first 10 months of the financial year 2024-25 against 39.7 lt in the same period of 2023-24. He attributed this reduction to the decreased export of rapeseed meal and castor seed meal.
Asthana said the Government’s focus on increasing ethanol production from maize and other cereals to reduce the import of petroleum products has created challenges for the domestic solvent extraction industry. Excessive production of DDGS used for cattle feed has reduced the demand for oilmeals.
To address this issue, SEA organised a webinar on the ‘Impact of excess maize DDGS production on domestic oilmeal and oilseed prices’ recently. He said the webinar focused on potential solutions, including exporting excess DDGS and adding value to oilmeals for better pricing.
Congratulating the government for prioritising the agriculture sector in the recent Budget, he said it had introduced ‘Aatmanirbhar Oilseed Abhiyan’ in the previous Budget with an allocation of ₹10,000 crore over the next six years, aiming to reduce edible oil dependence from 60 per cent to 30 per cent.
Mentioning that this allocation was too low to generate visible and impactful results in increasing oilseed production and productivity, he said: “Given the Government’s focus on agriculture as a growth engine for the economy, we hoped for an additional annual allocation of at least ₹5,000 crore for the Oilseed Development Programme.”