USDA: Indonesia Falls to Third Among India's Vegetable Oil Suppliers

Jakarta — Indonesia fell to third place among India's vegetable-oil suppliers in marketing year 2025/26 (October–September), behind Argentina and Malaysia, according to a US Department of Agriculture (USDA) report dated 10 November 2026. The USDA partly linked Indonesia's declining trade with India since 2022/23 to higher domestic palm-oil consumption as biodiesel blending mandates expanded. That is the agency's assessment, not evidence that biodiesel alone caused the change in ranking.

The finding matters for Indonesia because India is a major vegetable-oil import market and palm oil feeds into Indonesia's biodiesel supply chain. Other suppliers' output and prices also shape the contest. The USDA specifically cited stronger production and more competitive prices when explaining increased Malaysian and Thai palm-oil shipments to India.

A ranking across several oils

In its November Oilseeds: World Markets and Trade report, the USDA said Argentina had become India's largest vegetable-oil supplier, helped by soybean-oil demand and export-tax cuts that made Argentine oil more competitive. Malaysia moved ahead of Indonesia as well. The ranking covers all vegetable oils; it should not be presented as a ranking solely of palm-oil exporters.

The USDA said Indonesia's vegetable-oil trade with India had declined since 2022/23 amid rapidly expanding biodiesel blending requirements and rising domestic palm-oil use. It also said Malaysia and Thailand increased palm-oil shipments to India in 2025/26, supported by better production than a year earlier and prices competitive with Indonesian-origin cargoes.

The Hindu BusinessLine reported the USDA finding on 11 November and cited separate figures from the Solvent Extractors' Association of India (SEA). For November 2025 to September 2026, SEA recorded 3.42 million tonnes of Indian edible-oil imports from Argentina, 2.97 million tonnes from Malaysia and 2.90 million tonnes from Indonesia. That SEA window is different from the USDA's October–September marketing year; those figures must not be represented as USDA's complete annual totals.

What it means for Indonesia

The figures show more competition in India's vegetable-oil market as Indonesia uses more palm oil at home for biodiesel. Yet the sources do not quantify precisely how many tonnes of lost Indonesian exports to India resulted from the blending mandate. A change in suppliers' ranking cannot, on its own, establish a fall in Indonesian fresh fruit bunch (FFB) prices or settle the case for changing the B50 policy.

BusinessLine quoted Indian industry representatives who said Indonesia would remain a major supplier given the scale of its exports. Argentina's gains also came through soybean and sunflowerseed oils, rather than direct competition in palm oil alone. Specifying the product mix and reporting period is therefore essential when comparing origins.

For 2026/27, the USDA expects India's total vegetable-oil imports to reach a record. It forecasts higher sunflowerseed-oil imports and a slower rise in palm-oil imports given global supplies, while soybean-oil imports are expected to decline. These are forecasts, not shipments already completed.

Trade data are not a policy decision

The USDA's supplier ranking describes trade in several oils. It is not a new Indonesian government decision on biodiesel blending or the levy administered by the Plantation Fund Management Agency (BPDP). Evaluating the impact on exports and growers would require comparable actual figures for palm-oil trade, biodiesel uptake, stocks and FFB prices, rather than an inference from a single ranking.

India's changing supplier mix underlines the interaction between transport-fuel policy and food-oil markets. The contribution of each factor still needs to be tested against like-for-like trade data before it can support a firm claim about the benefits or costs of a higher blending mandate.