Choudhary expects demand to pick up in the second half of the year, which typically accounts for a larger share of India’s annual edible oil consumption. At the same time, he believes that any significant El Niño event could affect palm oil production in key producing regions and tighten global supplies.
“Even without El Niño, the markets are looking firmer going forward,” Choudhary said. He added that if weather disruptions materialise, they could significantly alter supply-demand dynamics across agricultural commodities.
Choudhary said concerns around El Niño are being closely monitored globally because of their potential impact on palm oil output in Southeast Asia and India. Palm oil is the world’s most consumed edible oil, and even a small decline in production could have a significant effect on prices.
Choudhary said that edible oil consumption has weakened in recent months, particularly in the hotels, restaurants and catering segment. According to his estimates, overall edible oil consumption may have fallen by around 10% over the last three months.
He attributed the slowdown to issues affecting out-of-home consumption, including challenges faced by restaurants and food-service businesses.
However, household demand for branded edible oil products has remained stable.
He expects stronger consumption during the festive and monsoon season. India’s edible oil demand is estimated at around 24 million tonne annually, with approximately 55% of consumption occurring during the second half of the year.
While demand is expected to increase, Choudhary said global production patterns typically help balance seasonal consumption. Palm oil production generally peaks between May and November, providing additional supply during periods of higher demand.
He also highlighted structural changes in the market caused by biofuel policies. According to Choudhary, increasing use of edible oils for biofuel production has permanently reduced the volume available for food consumption.
Geopolitical developments remain another factor influencing the market. Choudhary noted that disruptions linked to the West Asia conflict have limited imports into some countries, resulting in lower inventories. Once trade flows normalise, he expects additional demand to emerge from the region.
For the full interview, watch the accompanying video
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