India's edible oil imports will rise as demand rises and oilseed yields face risks

New Delhi: India is likely to import more edible oil next year despite an increase in early planting of oilseeds as insufficient rainfall darkens the outlook for production of key crops such as soybean and groundnut while consumption continues to grow, three trade executives said.

Imports are likely to rise 3% to 17 million tonnes in the oil year starting in November, according to industry estimates. This will follow estimated imports of 16.5 million tonnes of oil this year and 16.01 million tonnes in 2024-25, they said.

India consumes about 26 million tons of edible oil annually, which remains one of the largest agricultural import commodities for the country.

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“India needs an additional 8-10,000,000 tonnes of edible oil every year to meet growing domestic demand. Producing this amount would require an additional 25-30,000,000 tonnes of oilseeds. Despite an increase in acreage in the just-concluded kharif season, we expect yields to decline due to less rainfall. The outlook for the rabi season is also uncertain due to these factors vis-a-vis oil. will increase,” said BV Mehta, executive director of the Solvent Extractors Association of India (SEA), the apex body for the vegetable oil industry and solvent extraction trade.

It depends on the import

India remains dependent on imports for around 60-65% of its edible oil requirements. Total area under oilseeds is estimated at 19.66 million hectares as of October 2, up from 19.63 million hectares a year ago, according to agriculture ministry data. “However, the increase in acreage may not translate into a commensurate increase in domestic production, leaving stocks vulnerable to fluctuations in crop yields and weather conditions,” Mehta said.

Soybean, India’s largest oilseed crop, covered 12.3 million hectares, with acreage falling by 14,000 hectares. Meanwhile, groundnut acreage increased by 1,000 hectares to 5.1 million hectares. Among other oilseeds, sunflower saw an increase of 59,000 hectares, bringing its total cultivated area to 129,000 hectares. Acreage trends for other crops, including sesame and hops, also varied.

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According to experts, demand for edible oil in India continues to rise, driven by population growth and rising incomes.

“Edible oil consumption in India grew from 22.8 MMT in FY22 to an estimated 25.7 MMT in FY26, representing a steady ~3% CAGR, in line with the long-term structural growth trend in the industry. Consumption growth continues to be supported by favorable demographics and rising per capita usage,” said Rahul C Guil Ratings, Senior Director, Head of Ratings. Overall, edible oil consumption in India is projected to grow by 3% to around 26.5 million tonnes in FY27, according to Crisil.

“Despite inflationary pressures and volatility in commodity prices, demand has remained resilient, driven by population growth, urbanization, changing dietary habits, higher consumption of processed foods and expansion of the food service sector. As a result, the edible oil industry is expected to maintain steady volume growth of ~3% per annum over the medium term,” Guha added.

Production key

As consumption continues to grow, boosting domestic oilseed production will continue to be key to reducing import dependence and exposure to global price fluctuations. Initiatives such as the National Edible Oil Mission are expected to gradually boost domestic production and support growing demand.

India’s per capita edible oil consumption is estimated at 17.6 kg in FY26. While demand continues to grow, doctors warn that excessive consumption can lead to health complications.

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“While healthy fats play a key role in cellular structure, hormone production and nutrient absorption, exceeding the Indian Council of Medical Research (ICMR) recommendation of 20 to 30 grams of visible oil per day poses a significant long-term risk to gastrointestinal and overall metabolic health,” said Dr. Saurabh Bansal, Minimal Access and Gastrointestinal Surgeon and Founder and Director of The Clinics The Clinicsc.