India’s Crude Palm Oil Imports Rise in November as Price Gap Widens

India increased purchases of Crude Palm Oil (CPO) in November as refiners capitalized on favorable spreads, shifting demand away from costlier soft oils and refined palmolein.

The data underscores how New Delhi’s import duty structure continues to reshape trade flows in the world’s largest vegetable oil market. While total edible oil imports fell to a seven-month low of 1.15 million metric tonnes—down 13.3% from October—the composition of the import basket shifted decisively toward crude palm oil.

According to the Solvent Extractors’ Association of India (SEA), total palm oil imports stood at 632,341 tonnes. Although this figure represents a 25% year-on-year drop due to a near-total collapse in refined palmolein shipments, imports of CPO specifically rose 14% compared to the same period last year.

Price advantage drives shift Refiners are pivoting back to CPO as the price gap widens. In November, palm oil traded approximately $100 per tonne cheaper than soyoil and nearly $200 below sunflower oil. This discount, combined with a wider duty differential between crude and refined oils introduced earlier this year, has incentivized domestic processing over importing finished products.

Consequently, imports of rival soft oils slumped. Soyoil shipments fell 18% to 370,661 tonnes, while sunflower oil imports plunged 45% to a two-year low of 142,953 tonnes.

Unusual flows from China In a rare trade anomaly, India imported nearly 70,000 tonnes of soyoil from China in November. Traders say Chinese crushers, grappling with excess supply and weak domestic margins, offered deep discounts to clear inventory, making Chinese origin temporarily competitive against South American supplies.

Additionally, India diversified its basket by importing 5,000 tonnes of canola oil from the UAE and Canada, a sharp increase from negligible volumes a year ago.

Outlook for December Market participants indicate that the preference for CPO is extending into December and January shipments. Some refiners have reportedly cancelled forward contracts for sunflower oil to switch to palm, aiming to protect margins. This renewed demand from India is expected to support benchmark palm oil futures in Malaysia and Indonesia while capping gains for soyoil on the Chicago Board of Trade.

Summary

India’s Crude Palm Oil (CPO) imports rose 14% year-on-year in November, driven by a price discount of $100-200 per tonne against rival soft oils. While total edible oil imports fell to a seven-month low due to a collapse in refined palmolein trade, refiners are aggressively switching to CPO to maximize margins. The shift is expected to support palm prices in Southeast Asia while dampening global demand for sunflower and soyoil.

FAQs

Q1: Why did India buy more Crude Palm Oil (CPO)? 

CPO was significantly cheaper than alternatives in November (trading at a $100/tonne discount to soyoil). Additionally, government tax policies currently favor importing crude oil for local refining over importing refined oil (palmolein).

Q2: Why did total edible oil imports fall? 

Total imports hit a seven-month low because the rise in CPO buying was not enough to offset the massive drop in refined palmolein, sunflower oil, and soyoil imports. High global prices for soft oils discouraged bulk buying.

Q3: What is the “Duty Differential”? 

This is the difference in tax rates between importing crude oil versus refined oil. The Indian government widened this gap in May 2025 to protect domestic refiners. It makes importing refined oil expensive, effectively killing the trade in refined palmolein.

Q4: Why did India buy soyoil from China? 

This is unusual. Typically, India buys soyoil from Argentina or Brazil. However, excess supply in China forced Chinese crushers to sell their stock at a discount, making it cheap enough for Indian buyers to snap up nearly 70,000 tonnes.

Q5: How does this affect global prices? 

India is the world’s biggest buyer. Its shift back to palm oil provides price support for producers in Indonesia and Malaysia. Conversely, its reduced appetite for sunflower and soyoil puts downward pressure on prices in the Black Sea region and the Americas.