Indian demand for palm oil to rebound as prices at discount to Chinese soyoil, analysts say
09/02/2026 (Reuters), Kuala Lumpur - Indian demand for palm oil is set to rebound this year as prices have come down, analysts said on Monday, although competition from Chinese soyoil, an alternative oil, will cap growth.
A surge in Chinese soyoil exports early last year dampened demand for palm oil in India, as consumers switched to using soyoil instead.
However, that led to an excess supply of palm oil which eventually pushed the price of palm oil down below soyoil prices.
Crude palm oil is currently being offered at about $1,165 a metric ton on a cost, insurance and freight basis for March delivery to India, compared with around $1,281 for crude soyoil, the Solvent Extractors' Association of India (SEA) said.
Anilkumar Bagani, commodity research head at Mumbai-based brokerage Sunvin Group, forecast India will import about 8.5 to 9 million tons of palm oil this year. That would be up from 7.6 million tons in 2025, according to SEA figures.
India is the world's biggest importer of palm oil, but Chinese soyoil exports will continue to keep demand for palm oil in check.
China has stepped up exports of soyoil as it has excess supply after importing a record 111.83 million metric tons of soybeans in 2025, a 6.5% increase, driven by heavy South American purchases to hedge against trade tensions.
"They (China) are exporting almost 100,000 tons a month, and that is hurting the Indian market. It is hurting palm, it is hurting Indian soya, it is hurting everyone. So that is a big factor which the market is ignoring," veteran industry analyst Dorab Mistry told Reuters ahead of an industry conference in Kuala Lumpur.
"China was an importer, (but) now China is exporting," said Mistry, who is also director of Indian consumer goods company Godrej International.
Indonesia and Malaysia are the world's biggest palm oil producers.
An Indonesian analyst said strong production of palm oil and soyoil would pressure the palm oil contract, which Indian buyers will take advantage of.
"India, by hook or by crook, they have to import palm because of the price absolute value," said an analyst at a major Malaysian palm oil firm.
India's overall consumption of vegetable oils - predominantly palm, sunflower, soya and rapeseed - is expected to total around 25 million metric tons this year, barely changed from 2025, said Bagani. Domestic supply of the oils is expected at between 9 and 9.5 million tons.
"We will have to import around 15.5 to 16 million tons of edible oils," Bagani told Reuters.
"About 8.5 to 9 million tons of palm oil, around 4 million tons of soybean oil, and 2.8 million tons of sunflower oil," Bagani added.
Mistry too forecast that India's edible oil demand will be flat this year as population growth is not accelerating, and the government is urging less oil consumption for health reasons.