Over the past 4-5 months, palm oil has become more expensive than soft oils, prompting domestic consumers in India to shift towards alternatives such as sunflower and soyabean oil. This price increase in edible oils has been attributed to a 22% hike in duty in September 2024, in addition to supply concerns in key producing countries and the growing conversion of vegetable oils for biodiesel production.
P. Chandra Shekara Reddy, Senior Vice-President – Sales and Marketing at Gemini Edibles and Fats India Ltd (GEF), noted that there has been a gradual decline in palm oil consumption at the domestic household level due to the price hike. The shift is particularly evident in the sunflower oil category, where there has been a 25% price increase compared to palm oil’s 30% increase.
In response to the market trend, imports of palm oil into India have decreased during the first two months of the oil year 2024-25, while overall vegetable oil imports have increased by around 16%. Atul Chaturvedi, Chairman of Asian Palm Oil Alliance, highlighted that palm oil is losing market share to soya oil, and this trend could be a game-changer if it continues.
The data from the Solvent Extractors Association of India (SEA) shows that palm oil imports have decreased by 24%, while soft oils imports have more than doubled during the same period. This shift in consumption patterns is reflected in the rising demand for sunflower and soyabean oil, as consumers seek alternatives to pricey palm oil.
Overall, the market dynamics are changing in the edible oil sector in India, with consumers showing a preference for sunflower and soyabean oils over palm oil due to their relative affordability and availability. This trend is expected to continue if palm oil prices remain elevated compared to other options in the market.
