IVPA’s Bhavna Shah underscores slow progress in acreage expansion, with palm oil yields unlikely to meet ambitious targets before the next decade

At the 24th International Black Sea Grain Conference, Bhavna Shah, Vice President of the Indian Vegetable Oil Producers’ Association (IVPA), outlined how India’s edible oil sector is entering a decisive phase where economic resilience collides with structural tightness and global volatility.

Economic Growth Provides a Strong Backdrop

India’s real GDP is forecast to expand by 7.4 percent in FY 2025‑26, sustaining momentum after 8.5 percent growth in the previous year and rebounding from the ‑5.8 percent contraction in FY 2020‑21. Services are leading the surge, with financial, real estate, and public administration growing at 9.9 percent, while manufacturing and construction are expected to post 7 percent growth. “India’s macroeconomic strength is undeniable, but edible oils remain a structural vulnerability,” Bhavna observed.

From Stable Deficit to Volatile Deficit

India consumes 25–26 MMT of edible oils annually, but domestic production covers only 40–45 percent, leaving a 55–60 percent import dependence. This imbalance exposes India to crude oil volatility, currency fluctuations, and geopolitical shocks. Weak monsoons, Black Sea disruptions, and tightening biofuel mandates are converging in 2026/27, pushing India’s edible oil system from a stable deficit to a volatile deficit. “The challenge is whether India can absorb supply shocks without destabilising inflation,” Bhavna cautioned.

Domestic Production Constraints Persist

Oilseed growth remains structurally limited. The Oil Palm Mission may raise palm oil availability to 1.2 MMT by 2030, but progress is slow, particularly in the North‑East. Soybean, cottonseed, and rapeseed oil output show incremental gains but remain below targets. “Domestic expansion is lagging, and structural tightness persists despite policy intent,” Bhavna explained.

Imports Range‑Bound, But Mix Shifting

Imports remain range‑bound at 15–17 MMT, with per capita consumption growth stabilizing below 2 percent post‑Covid. Palm oil retains a cost edge but its share is declining, while soybean oil imports surged to 5 MMT in 2025‑26, competing directly for market share. Sunflower oil imports remain steady at 3 MMT. “India’s import mix is shifting from price‑optimised sourcing to supply‑driven procurement, raising cost pressures and reducing flexibility,” Bhavna noted.

Policy Levers Tested, But Incremental

MSP revisions remain incremental, while duty adjustments are largely tactical. Inflation, FX pressures, and trade dynamics continue to shape India’s edible oil equilibrium. The government’s National Mission on Edible Oils (NMEO‑OP) is driving acreage expansion and yield improvement, signaling clear intent toward import substitution and self‑reliance. Yet, as Bhavna emphasized, “Structural tightness will persist in the medium term despite long‑term interventions.”

India’s Strategic Role in Global Flows

India remains the largest structural demand hub, dictating global trade flows more than supply shifts. Its scale ensures it remains central to global price discovery and volatility. “India is moving from being a pure demand anchor to a policy‑driven market shaper. Tightness will remain, but its nature will evolve,” Bhavna concluded.