Indian edible oil sector turn cautious amid Iran crisis; oilmeals shipments may be hit
India’s edible oil sector is on alert after US-Israel strikes on Iran. With imports routed via the Strait of Hormuz and Red Sea, supply risks and higher freight may lift prices. Oilmeal exports to West Asia and Europe could also face disruptions.
Edible oil and oilmeals sectors in India are in a wait and watch mode following the situation arising from the US-Israel attacks on Iran. However, shipments of oilmeals to the Gulf and Europe could take a hit.
BV Mehta, Executive Director of the Solvent Extractors’ Association of India (SEA), told businessline that India’s edible oil supply is significantly dependent on imports. Palm oil is sourced primarily from Indonesia and Malaysia, while soybean oil is imported from Argentina, Brazil, and the US, and sunflower oil from Russia and Ukraine. A substantial portion of these shipments transit through the Strait of Hormuz and Suez Canal. Any disruption or blockage of this critical maritime route could affect supply continuity and lead to short-term volatility in availability and prices, particularly for sunflower oil.
Frieght to rise
Further, an increase in global crude oil prices may lead to higher freight and insurance costs, both internationally and domestically. This could raise the landed cost of edible oils and exert upward pressure on domestic prices. At this stage, however, the situation remains dynamic and requires close monitoring, Mehta said.
Sudhakar Desai, President, Indian Vegetable Oil Producers’ Association (IVPA), said that any escalation between the US and Iran has a direct ripple effect on India’s crude and edible oil markets. Rising crude oil prices not only increase logistics costs but also create inflationary impact on global prices due to the linkage between edible and global biofuel markets, and it can also increase the insurance risks of the vessels.
“Given, India’s heavy dependence on imported edible oils, these global supply chain disruptions will have impact on prices in India,” he said.
In terms of supply chain, especially for sunflower and soybean oils, there can be disruptions if there are problems around Red Sea area and the straits, especially from Black Sea area, Desai said, adding, “In the near term, we expect volatility to persist both in oils and also on dollar/INR prices with central focus on these geopolitical wars.”
SEA data showed that India imported 38.78 lakh tonnes (lt) of edible oils during the first three months of November-January of the oil year 2025-26 (November-October) against 39.21 lt in the corresponding period of the previous oil year. Of this, the share of sunflower oil 7.62 lt during November-January of the oi year 2025-26.
Oilmeals
On the export side, India exports oilmeals largely to South East Asia (approximately 65 per cent), West Asia (around 20 per cent) and Europe (about 15 per cent). If the conflict persists or escalates, trade flows to West Asia and Europe may face logistical and demand-side disruptions, potentially impacting export volumes and realizations, Mehta said
India exported a total of 32.35 lt of oilmeals to various countries during April-January 2025-26 against 43.42 lt in the corresponding period of 2024-25. India’s exports to West Asian markets stood at 4.43 lt during April-January 2025-26.
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Source : The Hindu Business line
