InfoSAWIT, MUMBAI – Rising global vegetable oil prices and increasing freight rates are prompting buyers in India to delay new purchases and prioritize prompt shipments amid concerns over potential supply disruptions linked to tensions in the Middle East.
According to Reuters, market participants said Indian importers are becoming more cautious due to uncertainties in shipping routes and escalating logistics costs.
A Mumbai-based dealer at a global trading firm said the surge in vegetable oil prices has made buyers reluctant to lock in new import contracts.
“Buyers are unsure whether prices will remain at current levels, and they are also worried that suppliers of soybean oil or sunflower oil may not be able to deliver on time as freight rates continue to climb,” the dealer said, as reported by Reuters and cited by InfoSAWIT on Thursday (March 12, 2026).
India is the world’s largest vegetable oil importer. Any shift in its buying pattern could limit further gains in global prices for palm oil, soybean oil, and sunflower oil, although it may tighten domestic supply in India in April.
Concerns Over Black Sea Shipping Routes
Most soybean oil imports into India come from Argentina and Brazil, with shipping times exceeding six weeks. Meanwhile, sunflower oil is typically supplied from Russia and Ukraine, with shipments from the Black Sea region taking around three to four weeks.
Sandeep Bajoria, Chief Executive of Sunvin Group, said the market is closely monitoring the risk of shipping disruptions.
“If the conflict escalates, sunflower oil shipments from the Black Sea may need to be rerouted around Africa instead of passing through the Red Sea,” he explained.
Such rerouting could significantly extend travel time and increase freight costs.
“A diversion via Africa could add more than 10 days to shipping times and raise freight costs by around US$20 per ton or more,” he added.
Rising Prices Squeeze Refining Margins
India meets nearly two-thirds of its vegetable oil demand through imports, including palm oil from Indonesia, Malaysia, and Thailand, which typically takes about one week to arrive.
Although palm oil supplies can still meet India’s short-term demand, buyers remain cautious as rising global prices are squeezing refining margins.
A trader in New Delhi said many buyers are relying on cheaper inventories purchased last month.
“Buyers prefer to use stocks purchased earlier at lower prices rather than buying from exporters at current higher prices. They are waiting for a correction in global prices,” the trader said.
Dealers also noted that last month imported crude palm oil was about US$100 per ton cheaper than crude soybean oil, but the two oils are now trading at nearly the same level in the global market. (T2)
