Weaker monsoon could result in edible oil inflation as sowing plunges 65%

New Delhi: With the monsoon only just reaching the entire country, India is expected to face an immediate challenge with its edible oil security, with Soybean sowing delayed across oil-producing areas in Madhya Pradesh and Maharashtra. According to a report by Reuters, farmers have planted soybeans on 6.92 thousand hectares, almost 65% less than the same time last year. This sudden contraction has come as India witnesses a 42% deficient monsoon this year. 

Usually, the critical planting window for major domestic oilseeds- soybean, groundnut and sesame, starts in June with the arrival of the southwest monsoon. However, the El Niño-induced rain deficit has caused  a major challenge to the overall output of oilseed crops, as farmers have been postponing sowing seeds in dry, unhydrated soil to avoid running the seeds. 

Oilseed plants are heavily rain-fed, unlike paddy or sugarcane, which can rely on localized tube wells or irrigation systems. 

For the government, this could translate into further loss of foreign exchange, even as India already sources almost 60% of its edible oil from abroad. So far, the vegetable oil import bill has already jumped 19% during the first half of 2026, worsened by stronger sunflower and palm oil prices. A further failure in the domestic kharif crop will force India to import even higher volumes of Malaysian palm oil and Argentine soy oil, straining our trade balance. 

Edible oils carry a substantial weight in India’s  Consumer Price Index (CPI) food basket, and this supply deficit will eventually mean stronger retail price hikes for packed cooking oils. For the farmers growing soybean, this means a loss of disposable income, further straining demand later this year.