Soybean Oil Flows Reshape India’s Edible-Oil Balance

India’s soybean complex is entering a pivotal phase as August 2026 edible-oil imports dipped overall, yet the structure of flows is shifting decisively toward crude oils and away from refined products. Rising refined soybean oil shipments from Nepal, fed by duty-free crude imports, are adding another layer of competition. For soybeans, this means a market increasingly driven by crush and oil trade flows rather than raw bean imports alone. Import data for the first ten months of the current oil year show India’s total edible and non-edible oil inflows still around 4% higher year-on-year, despite a roughly 7% decline in August. Within this growth, crude edible-oil imports, particularly crude soybean oil, gained share at the expense of refined oils. At the same time, spot offers for physical soybeans across key origins remain relatively stable to slightly softer, suggesting short-term price consolidation rather than a sharp trend move.

Prices

FOB offers for soybeans and soy-based products (converted to EUR/t, latest quotes to 11 September 2026) indicate a broadly steady market with some regional divergence:

On the futures side, CBOT nearby soybean contracts are trading around the mid‑EUR 480–500/t equivalent, with modest gains in early September as traders reassess US yield prospects and robust import demand from key buyers including India. This backdrop aligns with the largely sideways physical price moves seen in India, China and the Black Sea over recent weeks.

Supply & Demand

India’s August 2026 edible and non-edible oil imports fell about 7% year-on-year, but cumulative volumes for the first ten months of the oil year remain roughly 4% above the previous year, underscoring firm structural demand. Crude edible oils are gaining dominance in the import mix, while refined-oil arrivals have declined sharply.

Within this shift, crude soybean oil has become a key growth segment alongside crude palm and sunflower oil. Recent trade data indicate that crude soybean oil imports, together with other crude grades, underpin the higher cumulative volumes, while refined soybean oil imported directly under normal tariffs has contracted.

Nepal is an important exception to the refined-oil decline. Leveraging preferential trade arrangements, Nepal imports crude soybean oil, processes it domestically and re-exports refined soybean oil to India at zero duty. August flows from Nepal comprised mostly refined soybean oil, complemented by sunflower oil, RBD palmolein and rapeseed oil. This effectively channels global crude soybean oil supplies into India via a refined route, intensifying competition for domestic refiners.

Fundamentals

The core fundamental change is India’s increasing dependence on crude edible-oil imports, including crude soybean oil, for its domestic refining sector. With refined imports (excluding Nepal-origin refined oils) falling sharply, refiners are sourcing more crude to keep plants running, while still facing margin pressure from duty-free refined oil inflows from Nepal.

Over November 2025–August 2026, India imported an estimated 4.03 million tonnes of crude soybean oil and over 0.5 million tonnes of refined soybean oil, while Nepal’s refined oil exports to India exceeded 800,000 tonnes in 2025 and continued strongly into 2026, predominantly as refined soybean oil. This two-tier structure—growing crude imports plus duty-free refined volumes—supports ample soybean oil availability domestically, tempering upside in local bean prices despite firm global demand.

Weather is a secondary but relevant factor. The 2026 southwest monsoon is tracking below normal, with September rainfall expected to remain deficient over large parts of India. This raises some risk for the upcoming domestic soybean and oilseed harvests, but high import availability of crude soybean oil and alternative oils currently offsets concerns, at least for near-term supply.

Short-Term Outlook

In the coming weeks, India’s soybean complex will be driven by three interacting forces: continued preference for crude oil imports, the scale of refined oil arrivals from Nepal, and international soybean and soyoil price trends. Palm-oil availability and pricing will remain a key swing factor, as relative spreads between palm and soybean oil determine substitution in India’s large food sector.

As long as crude soybean oil remains competitively priced versus palm and sunflower oil, and Nepal’s refined soybean oil keeps entering duty-free, India’s domestic crushers may struggle to fully pass on higher costs into bean prices. Any further tightening in global soybean balances or weather-related downgrades to South American or US crops, however, could quickly feed through to higher import-parity levels.

Trading Outlook

• Importers in India: Use current relative stability in FOB soybean prices (US ~0.62 EUR/kg, India ~0.87 EUR/kg) to secure nearby coverage in crude soybean oil and beans, while maintaining flexibility beyond the festive demand peak.
• Domestic refiners: Monitor policy discussions on Nepal-origin refined oils closely; margins will remain compressed as long as duty-free refined soybean oil competes with locally refined crude.
• Producers/exporters (US, Ukraine, Brazil): India’s steady crude-oil demand and below-normal monsoon point to sustained import needs; consider using mild futures strength to lock in forward sales, especially for non-GMO and higher-spec beans.
• End users and feed buyers: Current stability in soybean prices and ample oil availability favour gradual, layered procurement rather than aggressive front-loading, keeping some exposure open to potential downside should global crops surprise to the upside.

3-Day Directional View (EUR-based)

• India (FOB New Delhi, soybeans sortex clean): Sideways; prices seen near 0.87 EUR/kg with limited short-term catalysts.
• US (FOB, No. 2 soybeans): Slightly firm bias, tracking CBOT futures; expected in a narrow range around 0.62–0.64 EUR/kg.
• Ukraine (Odesa, GMO-free, CPT): Mildly supportive; recent uptick toward 0.38 EUR/kg may persist on logistics risk premiums and steady EU/Asian demand.