India’s palm oil imports from Malaysia hit an 11-month high of 312,000 tonnes in September, tightening global vegetable oil supplies. Prices are currently holding above MYR (Malaysian ringgit) 4,400 per tonne, supported by Indonesia’s potential B50 biodiesel mandate and falling soybean oil exports from the US, Brazil and Argentina.
Analysts warn consumers may see sustained upward pressure on cooking oil prices heading into 2026.
According to a press release issued by the Malaysian Palm Oil Council (MPOC), the country’s palm oil exports surged in September, led by a sharp rebound in shipments to India, signalling a critical boost for the world’s largest edible oil importer.
Exports increased 7.7 per cent month-on-month to 1.42 million tonnes (mt), with in September South Asia seeing the largest gain. Shipments to India gained, underscoring its continued reliance on Malaysian palm oil amid tightening global supplies.
Palm oil inventories in Malaysia climbed to 2.36 mt – the highest in nearly two years – even as export growth outpaced domestic production. Domestic consumption normalised to 300,000-350,000 tonnes per month after a record 499,000 tonnes output in August, while imports rose 33.9 per cent to 20,000 tonnes, adding to the stockpile.
Biodiesel mandate
Global palm oil prices traded at a premium to soybean oil in September, with palm oil priced $26 per tonne higher than soybean oil in India and $42 higher in Europe.
Analysts say Indonesia’s potential B50 biodiesel mandate — which could divert 17 mt of palm oil to biofuel use — is keeping the market on edge. With Indonesia consuming around 10 mt for food, the available exportable supply could fall below 22 mt, down from a historical range of 24-28 mt, the release said.
Vegetable oil supply in the new season, starting November 1, is expected to remain tight. Soybean oil exports from the US and Brazil are projected to drop 41 per cent due to rising domestic biofuel demand, while Argentina’s front-loaded soybean shipments following a temporary export tax exemption are expected to limit soybean oil availability. Sunflower oil prices remain firm, trading above palm and soybean oil in Europe due to tight supplies.
Prices to hold steady
India, as a major importer, is poised to feel the impact of these constrained supplies. With palm oil stocks in major consuming countries, including India, already high, buyers are expected to remain cautious. Global vegetable oil prices are projected to stay firm through 2025, with Malaysian palm oil prices projected to hold steady above MYR4,400 per tonne. Market sentiment remains cautious amid weak crude oil prices, high vegetable oil inventories in major consuming markets such as China and India, intensifying US-China trade tensions and a build-up of global soybean stocks, the MPOC release said.