Palm Is $300 Cheaper Than Sunflower. Procurement Still Cannot Buy Three Months Ahead.
Palm oil is cheap again, but only against the other oils. That distinction is running India's edible-oil buying this month. Palm is trading about $300 a tonne below sunflower oil and about $100 below soybean oil, and Indian buyers have responded the way buyers do when a spread opens that wide: they have bought palm, heavily and daily, through the festive peak. The trap is in the second half of the sentence. Cheap relative to sunflower is not cheap in absolute terms, and a refiner who confuses the two will misprice November.
A $300 gap, on top of a higher floor
Start with the spread itself. Reporting this week puts palm at $300 a tonne below sunflower oil, one of the widest gaps in recent years, with Black Sea disruption tightening sunflower supply and record stocks in Malaysia pressing palm down. Indian purchases ran at 20,000 to 30,000 tonnes a day over the past two weeks, helped by festive demand that typically lifts consumption 10 to 15 per cent before Diwali. Ocean freight, meanwhile, rose $15 to $20 a tonne in ten days. Part of the saving is already being handed back in freight.
Now look at the floor under all three oils. In September, crude palm oil averaged $1,285 a tonne, up 10.4 per cent on a year earlier. Crude soybean oil was $1,314, up 11.2 per cent. Crude sunflower oil was $1,432, up 10.8 per cent. Those are the September price comparisons published by the Solvent Extractors' Association. Add the currency. The rupee moved from ₹88.32 to ₹95.51 to the dollar over the same year, a depreciation of about 8.1 per cent. A buyer who locked palm at the wide spread still paid more, in rupees, than the same tonne cost last September. The spread is real money. It is not a falling market.
What eleven months of buying already show
The import record to September tells you this is not a two-week spasm. India imported 151.64 lakh tonnes of edible oil in the first eleven months of the oil year, up 3.27 per cent on 146.83 lakh tonnes a year earlier. Palm accounted for 73.52 lakh tonnes of that. Soybean oil brought in 51.76 lakh tonnes. Sunflower, the expensive oil in the spread, slipped to 26.24 lakh tonnes.
| Oil | Nov–Sep 2025-26 (lakh tonnes) | Nov–Sep 2024-25 (lakh tonnes) | Change |
|---|---|---|---|
| All edible oils | 151.64 | 146.83 | +3.27% |
| Palm oil (total) | 73.52 | 69.80 | +5.32% |
| Soybean oil | 51.76 | 50.13 | +3.25% |
| Sunflower oil | 26.24 | 26.75 | -1.90% |
| Crude oils (all) | 144.23 | 129.93 | Share rising |
| Refined oils (all) | 7.40 | 16.89 | Share 5%, from 12% |
Source: Solvent Extractors' Association data reported 15 October 2026. Farmioc.
The crude-refined split matters for refiners. Crude imports rose to 144.23 lakh tonnes while refined imports more than halved, and the refined share fell from 12 per cent to 5 per cent. That is domestic refining capacity being used, which is the policy intent. It also means more of the country's exposure now sits in crude prices and freight, not in finished-oil prices. Argentina was the largest single supplier at 34.43 lakh tonnes, mostly crude soybean oil. Refined oil still entered from Nepal at 6.82 lakh tonnes under the SAFTA route, a flow the Association flagged again. Anyone modelling landed cost without that channel is missing a live competitor.
The tariff value is part of the landed cost, not paperwork
Customs does not assess duty on whatever a buyer wishes the price was. From 16 October, the notified tariff value for crude palm oil is $1,223 a tonne under Notification 86/2026, with RBD palmolein at $1,245 and crude soybean oil at $1,287. Those values, set by the Central Board of Indirect Taxes and Customs, anchor the duty calculation regardless of the invoice spread a trader negotiated. When global prices soften but tariff values hold, the effective saving shrinks. Procurement teams that track only the futures screen and not the fortnightly tariff notification will keep finding a gap between the price they thought they bought and the cost that lands in the tank.
Why nobody can simply stockpile the discount
If palm is cheap and the outlook is firm, why not buy three months and sit on it? Tankage answers that. In an interview on 1 October, the Association's president put factory storage at ten to twelve days, fifteen at the most, and said plainly that three months cannot be stored in advance. Ports, he added, are already full. So the wide spread can be used only at the speed the system can physically take oil. That constraint, not conviction, sets the buying pace — and it is why daily purchases of 20,000 to 30,000 tonnes, sustained, are the meaningful signal. The market is taking the discount as fast as its tanks allow.
The forward view, labelled as forecast, points the other way on price. The same interview forecast September–October imports at 3 to 3.25 million tonnes and the full oil year at about 16.5 million tonnes, and described the whole basket as bullish over the next six to twelve months on El Niño risks to Indonesian and Malaysian output and on Indonesia's B50 biodiesel mandate absorbing exportable supply. Those are industry forecasts from 1 October, not outcomes. Treat them as a reason to keep cover rolling, not as a price promise. The Association also noted the substitution limit: palm has uses, notably in bakery, that other oils cannot replace, though as much as a million tonnes of price-sensitive demand could shift to soybean oil if palm rose steeply.
What to do with a wide spread and a high floor
Buy the spread, respect the floor. That is the whole brief. Take palm while it is $300 under sunflower, because that gap will not stay open once Malaysian stocks draw down or Black Sea loadings normalise. But price finished product off the absolute landed cost — September's higher year-on-year prices, a rupee near ₹95.51, the current tariff values, and freight up $15 to $20 — not off the headline discount. And plan in days of tank cover, not months of ambition, because storage is the binding constraint in this market.
PriceHub tracks the crude spreads, tariff values and import mix that set a refiner's real landed cost, so a procurement desk sees the floor move at the same time as the spread. The discount makes the headline. The floor decides the margin.