The Solvent Extractors’ Association of India (SEA) has urged the Government to provide policy support to address the growing challenges facing the edible oil industry due to the West Asia crisis, particularly the significant rise in the landed cost of oils. In a memorandum submitted to the Government, SEA noted that the cost of palm oil has surged by over $105 per tonne, while soybean oil has increased by $80 per tonne since the onset of conflict between the US and Iran.
As per SEA’s report, the C&F (Mumbai) price of RBD palmolein soared by $120 per tonne, rising from $1,115 per tonne on February 27 to $1,235 per tonne on May 7. Similarly, the C&F price for crude palm oil (CPO) increased by $105 from $1,150 to $1,255 per tonne, and soybean oil prices rose by $80 from $1,230 to $1,310 per tonne during the same period.
Sanjeev Asthana, President of SEA, emphasized that while the ceasefire has stabilized trade flows, prices for most oils remain higher than pre-war levels. Rising fossil fuel prices have led several countries to enhance biodiesel blending mandates, with Indonesia increasing its blending ratio to 50% and Malaysia raising it to 15%. These actions, combined with higher ocean freight costs, have further inflamed the landed costs of imported edible oils in India.
Asthana pointed out that despite the ceasefire, structural issues such as elevated freight rates, insurance premiums, and tight global availability continue to affect the market. This results in higher import bills for India, pressing working capital requirements and sustaining domestic price pressures, with no immediate relief expected. He noted, however, that prices might normalize once hostilities cease.
The ongoing vulnerabilities in key shipping routes have significantly driven up freight and marine insurance costs, further elevating the import costs for edible oils in India. Freight rates have nearly doubled in certain corridors, with shipments from Argentina to Kandla/Mundra jumping from $70-75 per tonne to $140-145 per tonne, and Russian cargo rates increasing from approximately $55 to $90-95 per tonne. Freight from Malaysia and Indonesia has also risen from $40 to $55 per tonne.
On the insurance side, increased war-risk and marine premiums have escalated from about $15 per tonne to $20-25 for some origins. This cumulative rise in freight and insurance costs has imposed significant burdens on importers, squeezing margins and driving up domestic prices amid ongoing geopolitical uncertainties.
Asthana also highlighted an acute shortage of smaller, handy vessels preferred for palm oil transport, leading to reduced procurement flexibility and delayed shipment. This shortage has forced importers to depend on larger vessels and increased freight charges. Furthermore, prices for crude-linked derivatives, essential for packaging materials, have surged by approximately 50-60% since the conflict started, intensifying the pressure on profit margins as packaging costs account for 15-25% of total product costs.
Addressing currency volatility, Asthana noted that fluctuations in exchange rates have exacerbated cost pressures for India’s edible oil imports. The Indian rupee has depreciated by about 4.8%, from around ₹91 per US dollar on February 27 to ₹95.40 on May 4, ultimately raising the overall import expenses and impacting domestic edible oil prices.
In 2024-25, India exported about 4.5 million tonnes of oil meals, heavily relying on markets in West Asia and Europe. Exports to Far East countries like China and South Korea, which constitute approximately 65% of total exports, are now being hampered by global uncertainties, affecting exchange rates and incurring additional freight and logistics costs.
Asthana called for diversifying export markets, especially in the Far East, and enhancing trade ties through focused delegations and buyer-seller interactions.
In the memorandum, SEA requested the Government to subsidize freight costs for edible oil imports and provide ‘priority berthing status’ for vital commodities such as crude edible oil to help maintain a smooth supply chain and control price inflation. The association also sought higher incentives for agricultural export promotions, particularly oil meals, along with a 5% interest subvention for oil meal exports. The SEA urged timely and effective policy interventions from the Government to tackle these emerging challenges, ensure stable availability of edible oils, and alleviate cost pressures.
Published on May 11, 2026.
