In 2018-2022, the production of vegetable oils in India, including soy, gradually increased: in 2022, 9.3 million tons of vegetable oils were produced in the country, which is 5.9% higher than in 2021. Most of the production of vegetable oils in India in 2022 was rapeseed oil — 41.5% (3.8 million tons). Soybean oil accounted for 20.0% of production (1.9 million tons). Cotton oil was the third largest in terms of volume — it accounted for 14.6% (1.4 million tons).
Despite significant production volumes, India remains dependent on import of vegetable oils. The Government of the country is taking several actions to stimulate domestic production and increase the level of self-sufficiency in this type of product.
In mid-2023, the Government of India announced new minimum prices for the purchase of certain crops for the 2023/24 agricultural year, including some oilseeds, including peanuts, sunflowers and soybeans. This action is aimed at providing favorable prices for Indian producers, as well as encouraging farmers to diversify their oilseed crops.
The volume of consumption of vegetable oils in India in 2022 amounted to 29.3 million tons, which was a record since 2018. Compared to 2021, consumption increased by 8.4%.
Palm oil was consumed the most in the country — 9.5 million tons in 2022, which accounted for 39.1% of consumption. Soybean oil (5.8 million tons or 23.8%) and rapeseed oil (3.8 million tons or 15.9%) also accounted for a significant part of consumption.
Due to the centuries-old history of growing oilseeds, more than 15 different types of oils are consumed in India. Mustard oil is used mainly in the northern and eastern states (Rajasthan, West Bengal, Punjab, Kashmir, etc.), peanut oil — in the northwestern and central states (Gujarat, Maharashtra), coconut oil — in the southern (Kerala, Tamil Nadu, Telingana).
In 2022, against the background of geopolitical tensions and logistical problems, India experienced an increased level of food inflation. Indian consumers, due to rising prices, including for vegetable oils, were forced to switch from consuming traditional products to cheaper ones, such as soybean and palm oil.
In 2023, due to lower prices and stabilization of food inflation, the consumption of vegetable oils is projected to increase. This will also be facilitated by the cancellation by the Government of India of the decree on limiting the maximum reserves of vegetable oils in November 2022, in the light of which local traders, as well as operators of the hotel and restaurant business, began to increase their stocks. It is also expected that in the run-up to the state gubernatorial elections in 2023, as well as the national elections in 2024. The Government will take a number of additional measures to curb food inflation, which will be aimed at ensuring the availability of sufficient stocks of vegetable oils in the country.
The volume of soybean oil produced in India in 2022 amounted to 1.9 million tons, which is 21.2% higher than in 2021. The increase in soybean acreage contributed to the growth of production in 2022. India's self—sufficiency in soybean oil remains at a low level - domestic production provides only about a third of consumption.
In 2022, the volume of soybean oil consumption in India increased by 14.1% compared to 2021 to 5.8 million tons. The average consumption growth rate for 2018-2022 was at the level of 5.2% annually, while production increased by an average of 7.1% per year over the same period.
The main share (22.4%) in the vegetable oil market in India in 2022 was held by the Adani Group company. The second largest producer in terms of sales is the Indian manufacturer Patanjali Foods, which accounted for 10.1% of the market. Another 5.2% of the market was occupied by Emami. In total, the top 5 manufacturing companies accounted for 43.5% of the vegetable oil market in India in 2022.
Import of soybean oil in India
In 2022, India's soybean oil imports amounted to 3.91 million tons worth 6.10 billion US dollars, which is 11.1% (+389.3 thousand tons) in volume and 28.3% (+1.3 billion US dollars) in value above 2021. During 2018-2022, soybean oil imports increased annually by an average of 7.1% by weight and 27.9% by value.
The basis of soybean oil imports during 2018-2022 was crude soybean oil. In 2022 India imported 3.8 million tons of crude soybean oil worth 5.9 billion US dollars, which accounted for more than 97% of imports in this category.
Imports of refined soybean oil in 2022 amounted to 85.3 thousand tons (2.2%) by 154.8 million US dollars (2.5%).
In 2022, imports of crude soybean oil increased by 653.2 thousand tons (+20.6%) or by 1.8 billion US dollars (+43.9%). At the same time, imports of refined oil decreased significantly — by 75.6% in volume and by 75.2% in value.
In the structure of India's soybean oil importers in 2018-2022, Argentina occupied the leading positions, which in 2022 supplied 1.8 million tons of products (45.0% of imports), and Brazil, which exported 1.4 million tons (36.0% of imports) of soybean oil. The three main exporting countries also included the Netherlands, which supplied 246.8 thousand tons of products to India. In total, the three above-mentioned countries accounted for 87.3% of soybean oil supplies to India in volume.
Supplies from Brazil (2.8 times) and the USA (4.4 times) increased most noticeably in 2022. At the same time, imports from Argentina (-18.5%) and Nepal (-74.7%) significantly decreased.
Argentina and Brazil were the leading exporters of soybean oil to India in terms of value. Shipments of Argentine soybean oil in 2022 amounted to 2.7 billion US dollars (45.0% of the value of imports), while Brazil exported products worth 2.2 billion US dollars (36.0% of imports). The three main suppliers of soybean oil in value terms also included the Netherlands with a share of 6.2%. In total, the above-mentioned countries accounted for 87.2% of the value of India's soybean oil imports. Russia supplied $104.7 million worth of soybean oil to India in 2022.
The largest increase in exports in 2022 compared to the previous year occurred in Brazil, which increased supplies by 3.3 times (+1.5 billion US dollars). At the same time, imports from Nepal decreased significantly (-74.5% or -442.8 million US dollars).
In 2022, the average import price of soybean oil increased by 15.5% to 1,558 US dollars per ton. The most expensive products were supplied from Nepal at a price of US$ 1,804 per ton, which is 15.8% higher than the average import price. Products from Egypt were purchased at the most competitive price — 1,351 US dollars per ton (13.3% lower than the average price).
In 2022, the average import price of crude soybean oil increased by 19.4% to 1,552 US dollars per ton. The most expensive products were supplied from Vietnam at a price of 1,863 US dollars per ton (20.0% higher than the average import price). At the most competitive price, products were purchased from Egypt — 1,351 US dollars per ton (12.9% lower) and Singapore — 1,403 US dollars per ton (9.6% lower).
In 2022, the average import price of refined soybean oil increased by 1.6% to $1,815 per ton. The most expensive products were imported from Germany — 6,837 US dollars per ton (3.7 times higher than the average import price), France — 6,577 US dollars per ton (3.6 times higher), Belgium — 5,893 US dollars per ton (3.2 times higher) and the Netherlands — 5,462 USD per ton (3 times higher).
Products from Namibia were purchased at the most competitive price — 1,753 US dollars per ton (3.4% lower than the average import price), Bangladesh — 1,795 US dollars per ton (1.1% lower) and Nepal — 1,804 US dollars per ton (0.6% lower).