India Purchases Palm Oil Ahead of Festival Season, What Are the Impacts for Indonesia?

India has once again increased its palm oil purchases ahead of the festival season. In July 2026, India's palm oil imports surged nearly 50% compared to the previous month, reaching approximately 730,965 tons, the highest in five months. At the same time, India's total vegetable oil imports rose 33.3% to about 1.48 million tons, the highest since September 2025. This surge indicates that industry players are starting to stock up before food consumption increases during the major celebrations in the second half of the year.

The festival season in India can be likened to the Ramadan to Lebaran period in Indonesia. Food demand usually increases due to more family activities, feasts, processed food production, and the consumption of sweets and fried foods. The difference is that in India, this period consists of a series of various celebrations such as Ganesh Chaturthi, Dussehra, and Diwali, which last for several months. Reuters notes that India's festival season runs from around August to November, so the demand for food ingredients usually starts to rise before the peak celebrations.

Importers and oil processing companies in India do not wait for the festivals to begin to make purchases. Stocks are increased early so that market needs can be met when consumption peaks. Therefore, the expectation of increased consumption in the following months is already reflected in the July import figures. Reuters even predicts that India's palm oil purchases in August could still be above 700,000 tons.

The scale of the Indian market makes this demand change significant for the global palm oil trade. India is the world's largest vegetable oil importer and sources most of its palm oil supply from Indonesia and Malaysia. In the first eight months of the 2025/2026 marketing year, India imported about 4.94 million tons of CPO. Malaysia supplied about 1.96 million tons, while Indonesia supplied about 1.88 million tons.

India's position is also directly important for Indonesia. GAPKI data shows that India was Indonesia's second-largest palm oil export market in 2025 after China. Indonesia's palm oil exports to India reached about 3.97 million tons, although down 17.8% compared to 4.83 million tons the previous year. This means that changes in India's purchases still have a significant impact on Indonesia's palm oil export performance.

However, India's increased demand does not automatically flow entirely to palm oil. In July 2026, soybean oil imports rose about 31% to 498,881 tons, the highest in seven months, while sunflower oil imports increased about 4% to 251,639 tons. This composition shows that Indian importers continue to compare prices among vegetable oils before making purchasing decisions.

This competition became more apparent in August. Reuters predicts that India's soybean oil imports could reach a record of about 620,000 tons as its price becomes more competitive. The price gap between soybean oil and palm oil narrowed to about US$50 per ton, while sunflower oil traded at a premium of about US$200 per ton. This price difference could encourage Indian buyers to substitute some palm oil or sunflower oil with soybean oil.

The festival season indeed drives India to buy more vegetable oils, but the July data also shows one important thing: Indian buyers are not fixated on palm oil. When soybean oil offers increasingly competitive prices, the import composition can change quickly. Therefore, for Indonesia, the size of the Indian market does not automatically guarantee large palm oil sales. What determines this is whether Indonesian CPO remains the most attractive option when importers start comparing prices.