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Summary
Indian soybean growers are benefiting from the depreciation of the rupee against the US dollar, which has raised the cost of imported soybean oil and improved the competitiveness of domestically produced oil. The rupee has weakened by over 3.5 percent to around 92 per dollar, compared with 88.77 in early November, supporting domestic soybean prices and reducing demand for imports.
Weaker Rupee Raises Imported Soybean Oil Costs
The decline in the rupee has significantly increased the landed cost of imported degummed soybean oil. According to data from the Solvent Extractors Association of India, landed prices have risen to $1,245 a tonne, compared with $1,228 in mid-January, $1,158 in December and $1,118 a year ago.
This rise in import costs has narrowed the price gap between imported and domestically produced soybean oil, making local crushing more attractive for Indian buyers.
Import Deal Cancellations Accelerate
The surge in soybean oil prices over recent months has led Indian buyers to cancel several import contracts. In December, buyers cancelled around 85,000 tonnes of soybean oil imports. For February, March and April, cancellations have totalled approximately 45,000 tonnes.
Most of these cancelled contracts were signed with suppliers from Argentina and Brazil. In addition to currency depreciation, a growing price disparity has emerged, with South American soybean oil priced about $35 a tonne higher than oil produced from domestically crushed soybeans.
Import Volumes Rise Despite Cancellations
The cancellations come after a sharp increase in soybean oil imports in December, which rose to 505,000 tonnes compared with 371,000 tonnes a year earlier. Argentina has been the largest supplier, exporting 592,000 tonnes to India in the first two months of the current oil year that began in November 2025.
China has also emerged as an unexpected exporter, shipping 105,000 tonnes of soybean oil to India during the same period.
Global Prices and Policy Drive Price Disparity
The higher cost of imported soybean oil is being driven by two main factors. The depreciation of the rupee has raised import costs in domestic currency terms. At the same time, global soybean oil prices have strengthened since December after the US Environmental Protection Agency proposed higher renewable fuel standards for 2026 and 2027.
As a result, imported degummed soybean oil is currently costing around ₹1,31,700 a tonne at Mumbai, compared with approximately ₹1,29,000 a tonne for solvent-extracted soybean oil produced domestically.
Domestic Soybean Prices Gain Momentum
The improved competitiveness of domestic oil has lifted demand for Indian soybeans, pushing prices higher. Soybean prices are currently trading between ₹52,000 and ₹52,500 a tonne, up from around ₹45,000 in December. A year ago, prices were below ₹42,000 a tonne.
Prices have also been supported by the Madhya Pradesh government’s Bhavantar Bhugtan Yojana, a price deficiency payment scheme that assures farmers the declared minimum support price of ₹53,280 a tonne without physical procurement. Payments are made directly to growers’ Aadhaar-linked bank accounts.
Conclusion
The outlook for India’s soybean sector remains positive, supported by a weaker rupee, rising global prices and policy support at the state level. Higher domestic prices are improving farmers' realizations, while reduced import competitiveness is strengthening demand for locally produced beans. Weather-related risks to crops could further support prices, benefiting growers who are holding significant soybean stocks.