Rising Biofuel Demand And Global Shortages Impact Local Kitchen Budgets

Kitchen budgets across India may face fresh pressure as the global cooking oil market enters a period of high instability. Sudhakar Desai, President of the Indian Vegetable Oil Producers’ Association (IVPA) and CEO of Emami Agrotech, recently highlighted that trade shifts and new energy policies are making edible oil prices increasingly unpredictable.

Speaking at a major industry conference, Desai explained that cooking oils are no longer just food items; they are now heavily linked to the energy sector. For instance, countries like Indonesia are using massive amounts of palm oil for biodiesel. This shift, combined with geopolitical tensions, means that even small changes in international taxes or trade rules can cause sudden and sharp price hikes in the local market.

For a country like India, these global changes have a direct impact. Domestic production is expected to reach only 9.6 million tonnes for the 2025–26 period. This covers just 40% of what the country actually needs. To fill the gap, India will have to import nearly 16.7 million tonnes of oil. This heavy reliance on foreign markets makes cooking oil market India highly vulnerable to global shocks.

Currently, India’s import basket is changing. While palm oil remains a staple, its high cost has led to a drop in imports, falling from 10 million tonnes to about 8 million tonnes recently. Consumers and refiners are now looking more toward soybean and sunflower oils. However, since global production of these oils is not growing fast enough, prices remain high.

Mr. Desai noted that the path forward depends on stable government policies and trade agreements. Until supply chains stabilize, Indian consumers should prepare for a market where palm oil imports and general oil costs stay linked to international crude oil trends and currency fluctuations.