Edible Oil Market Update

Advisory Bazaar Info Services

KLC – Continued its decline for the fourth consecutive session. Prices hit a one-month low amid weak demand, sluggish exports, and steady production. Indonesia’s 2025 palm oil output is expected to rise by 8–10%, adding to supply pressure. The palm–soy oil spread has widened to $87 per ton. Currently, KLC is trading below the 4350 support level, indicating a possible trend reversal. Fundamentals remain weak, limiting any major upside potential. Market focus now shifts to Malaysia’s end-October palm oil stock report, where higher production and weak exports may push inventories up. Traders are advised to buy only as per necessity until a new trigger supports a stronger recovery.

CBOT – CBOT soy oil futures extended losses on expectations of sufficient global stocks. DCE soy oil futures have also shown sharp declines for the past three sessions. The Indian edible oil market remains under pressure due to increasing domestic crop arrivals. Even after Diwali, abundant global and local supplies have capped prices. As mentioned earlier, Soy Oil (Indore Line) around ₹1210–₹1220 remains a good level for fresh buying; hence, “buy on dips” strategy is recommended. Mustard oil prices are expected to remain weak due to subdued demand, high prices, and increased sowing acreage.

India Outlook – India’s dependency on imported edible oils has risen from 55% to nearly 65%, limiting domestic oilseed and edible oil production growth. The domestic market is now heavily influenced by international prices. A recent report suggests the need for rational customs duty management, a strong market data system, and industry consultation before policy changes.

India continues to be the world’s largest importer of edible oils, which poses a financial burden due to high foreign exchange outflow. The current import duty structure is outdated and needs to be made more dynamic. When global prices are high, duties should be reduced, and when prices are low, duties should be increased — ensuring that imported oil prices remain equal to or higher than domestic prices. This approach would protect the domestic processing industry and encourage farmers to grow more oilseeds.

Since 2015, import duties on edible oils have been revised around 25 times, creating uncertainty for the trade and industry. A stable and predictable policy framework is therefore essential to bring transparency and balance to the market.

Conclusion:

Weak demand, rising supply, and growing global stocks continue to weigh on the edible oil market. Both palm and soy oil trends remain bearish in the short term. Traders should adopt a cautious, need-based buying strategy, while policymakers should focus on long-term stability through duty reform and domestic production incentives.