Early September

Hello everyone, 

Please enjoy a fresh overview of the food oil market. 

🌏 India: Trade & Tax Shifts

India granted trade concessions to the UAE, potentially pressuring its mustard sector since the UAE hosts major crushing facilities. Now,  starting April 2026, veg oils from the UAE — including canola — will enter India at zero duty.

*Important note: this is not a flat duty cut, but a percentage reduction calculated on the prevailing import duties in India. At the time of the 2022 CEPA signing, the base duty stood at 5%. 

India–UAE Trade Pact Import Duties:

– Soy oil crude: 2% → 1% → 0% (by March 2027)

– Refined soy oil: 18.5% → 12% → 5% (by March 2027)

– CPO: 11% → 8% → 5% (by March 2028)

– Olein: 11% → 8% → 5% (by April 27)

Uncertainty remains as the updated CEPA text isn’t public. Earlier drafts included a 40% value-addition clause, nearly impossible for the oils sector. 

Still, UAE refining is expanding, supported by freight advantages (~$40–45/MT from Malaysia) and re-export opportunities.

GST cuts (from September 22, 2025) are as follows:

– ~400 items, incl. FMCG, edible oils, dairy.

– Edible oils/FMCG: cheaper stock, larger small packs.

– Dairy (ghee, butter, cheese): 12% → 5%.

– Faster GST refunds: within 7 days, easing liquidity.

– Lower GST on farm inputs: fertilisers, machinery, aquaculture at 5%.

Impact: consumer prices to fall, sales to rise, and agriculture to gain competitiveness. 

On a side note, India is the world’s key CSFO buyer, sourcing ~2M tonnes of oil a year from Russia.

🌻 Sunflower Oil: Tight Supply

Ukraine’s SFO exports in 2024/25 are to lose 24% y/y – dropping down to 4.73 MMT. The country faces reduced seed supply and weak crush margins. Farmers see SFS as the key liquid crop, with bids already at UAH 27k ($653) DAP; CPT port at ~$1,230/MT. Refined SFO trades at $1,320–1,340/MT.

Meanwhile, Russia’s SFO production may top 8 MMT, with exports at ~5.2 MMT. 

In Romania, FOB Constanța levels are at $585/MT (+$30 w/w, +$103 y/y). Yields are down to 1.49 t/ha (-20% vs 5-yr average), and drought keeps the prices firm. Romania remains a top importer of Ukrainian CSFO and among the top 3 buyers for Ukrainian RBD SFO.

Turkey will see crude SFO duty cut from 36% → 30% from October 1. Industrial processors are allowed either 1 MMT of seed duty-free or 400k MT crude oil at a 20% duty.

🌱 Canola & Rapeseed: Weak Demand

Without Chinese buying, November canola futures risk falling below CAD 600/MT, possibly testing CAD 580. Trade tensions, tariffs, and Brazil’s rise as a supplier weigh heavily. Harvest pressure in Canada and the US adds supply risk. Funds cut longs, may go short.

This week, the canola/rapeseed oil is the lowest-priced option in the vegetable oil complex. 

– Crude rapeseed oil trades at $1,080–1,100 CIF China.

– RBD rapeseed oil trades at ~$1,300 CIF GCC, ~$100 cheaper than RBD SFO.

In Ukraine, sowing is slow (377k ha vs 446k last yr). Oil demand is weak (<$1,100/MT), and meal trades at ~$180/MT. Crushers face poor margins.

🌿 Soybean Oil: Surplus & Margins

Global bean surplus, weak US exports to China, and South American supply pressure the market. Biodiesel mandates remain the key demand driver, with weather as the second critical factor.

Black Sea margins:

– Russia’s crush profitability is at ~40%, with soy oil demand up due to discount vs SFO.

– Ukraine sees positive margins, trading soy at UAH 17,500 ($423,2) DAP plant, soy oil at $1,140 FOB Nov, and meal at $270–280/MT.

🌴 Palm & Other Oils: Global Outlook

Palm oil is supported by Indian/Chinese demand, but Indonesia’s B50 biodiesel policy could cap exports. 

In China, corn oil remains unusually expensive (~$1,400/MT) above SFO, leaving soy and rapeseed oils as cheaper alternatives.

🌐 Overall, the edible oil market is volatile, shaped by demand shifts, weather, and geopolitics. We see surplus in rapeseed and soy, and tightness in sunflower and olive.

That’s all the news for now. Thank you for your attention, and stay tuned for the next update!