Argentina and Malaysia Surpass Indonesia as Top Vegetable Oil Exporters to India

New Delhi — Argentina and Malaysia have displaced Indonesia to secure the top positions as the largest vegetable oil exporters to India for the marketing year 2025-26, running from October to September. According to the United States Department of Agriculture’s (USDA) November report titled 'Oilseeds: World Market and Trade,' the shift marks a notable change in India's edible oil import landscape.

Data released by the Solvent Extractors’ Association of India (SEA) for October supported these findings. India imported 3.42 million tonnes (mt) of edible oils from Argentina during the November 2025 to September 2026 period. Malaysia followed closely at 2.97 mt, while Indonesia recorded 2.90 mt.

Total import figures highlighted by the USDA put palm oil imports at 8.4 mt, soybean oil at 5 mt, and sunflower oil at 3.85 mt. The USDA report noted that Argentina emerged as India’s leading vegetable oil supplier primarily due to robust demand for soybean oil, aided by recent cuts to export taxes that boosted the competitiveness of Argentine supplies.

Sudhakar Desai, President of the Indian Vegetable Oil Producers’ Association (IVPA), stated that Argentina’s structural advantage lies in its large, export-oriented crushing industry, allowing it to supply India with both soybean and sunflower oil. While its exact ranking may fluctuate annually, Argentina's presence across two major oils gives it multiple routes to maintain a substantial market share. Desai also pointed out that lower Argentine export taxes, strong Indian demand, and easier Black Sea shipments for sunflower oil all favored Argentina during this period.

BV Mehta, Executive Director of SEA, noted that availability is the primary factor driving Argentine oils into the Indian market. While traditional producers like Brazil and the US export raw soybeans due to limited domestic crushing facilities, Argentina's large crushing infrastructure allows it to supply finished oil directly.

However, opinions on the permanence of this trend vary. DN Pathak, Executive Director of the Soybean Processors Association of India (SOPA), remarked that Argentina has historically held a high share of Indian soybean oil imports and viewed the recent figures as part of an established pattern rather than a new anomaly.

The USDA report also highlighted the emergence of new suppliers, including China and Nepal. China has become a prominent soybean oil exporter following record domestic crushing rates, offering competitive pricing and shorter shipping windows for prompt delivery. Nepal has similarly expanded its market share by capitalizing on duty-free refined oil access under the South Asian Free Trade Agreement, often refining Argentine soybean oil prior to export.

Regarding sunflower oil, India modestly increased its imports in 2025-26 as Argentina offset reductions from Ukraine and Russia. Argentine pricing competitiveness led India to double its sunflower seed oil purchases compared to the previous marketing year, supported further by the Indian government's September decision to reduce the basic customs duty on crude sunflower oil to zero per cent.

Meanwhile, Indonesia's historic dominance as India's primary vegetable oil supplier has faced headwinds. According to the USDA, Indonesian trade with India has declined since 2022-23 due to the rapid implementation of domestic biodiesel blending mandates, which have increased local palm oil consumption. In response, Malaysia and Thailand increased palm oil shipments to India, aided by higher production volumes and price competitiveness.

"The shift in India's vegetable oil import origins highlights how domestic policy changes, international tax adjustments, and supply chain logistics directly impact cross-border trade. With Indonesia prioritizing domestic biodiesel mandates, suppliers like Argentina and Malaysia have successfully captured market share by leveraging production scale and competitive pricing. For businesses operating in the agricultural and commodities sectors, tracking these structural shifts in supplier dynamics is critical for navigating cost structures and supply security." — Dr. Shishir Gupta, Founder & CEO, StartupLanes