Soybean oil prices in Nagpur have surged sharply from Rs 1,600 in March to Rs 2,250 in October for a 15 kg tin. The oil industry experts attributed the escalation to a combination of global trade disruptions, India’s import dependence and unfavourable weather conditions which have affected domestic oilseed production. Confederation of All India Traders (CAIT) National Secretary and All India Edible Oil Traders Federation National President Shankar Thakkar explained that India’s oilseed output continues to fall short of its fast-growing consumption needs, which has compelled the country to rely heavily on imports. In 2024 alone, India imported around 4.15 million tonnes of soybean oil to bridge the gap between domestic demand and limited supply. “Our consumption pattern has expanded faster than our cultivation capacity,” Thakkar said. He added that this dependence leaves local prices highly sensitive to international fluctuations. 

 

According to the Solvent Extractors’ Association of India, the recent monsoon in Madhya Pradesh and Maharashtra, two of the country’s largest soybean-producing states, was prolonged and erratic, which led to significant crop damage. Industry estimates suggest losses of about 30 to 40 per cent, which have further tightened the availability of soybean for crushing and processing into oil. With local production falling behind, processors have increasingly turned to imports, which has further exposed the market to international price volatility.

 

 

On the global front, the soybean trade has been unsettled by rising political and economic tensions among major producing and consuming nations. The United States, Brazil, and Argentina, key players in the global soybean supply chain, have all experienced export disruptions and policy shifts that have affected the steady flow of soybean and soybean oil across markets. The United States has been engaged in ongoing trade negotiations with China and India, in order to expand its export basket for soybeans and dairy products. However, India’s resistance to importing genetically modified crops and its efforts to protect domestic farmers have added complexity to these discussions. 

 

 

Meanwhile, adverse weather in South America and fluctuating demand from China have contributed to global uncertainty. Thakkar explained that Argentina, a leading exporter of processed soybean oil and meal, has shifted a significant portion of its output toward raw bean exports, primarily to meet China’s growing demand. This shift has constrained global supplies of processed soybean oil, which has added further upward pressure on prices worldwide, including in India. Experts note that these simultaneous disruptions, reduced domestic output, shifting global trade routes, and heightened geopolitical uncertainty have created a perfect storm for price escalation. The ripple effect of global shortages has reached Indian wholesale and retail markets.