Nepal’s soybean, palm and sunflower oil exports surged after India raised import duties. A fresh tariff cut could now erode that advantage
India’s latest cut in import duties on crude and refined edible oils is threatening the competitive advantage that has helped Nepal emerge as a major supplier of processed vegetable oil to the Indian market.
The policy change, effective September 24, reduces India’s basic customs duty on crude palm and soybean oil to 5% from 10% and eliminates the 10% duty on crude sunflower oil. Duties on refined oils have also been lowered, with the basic customs duty on refined palm and soybean oil falling to 27.5% from 32.5%, and that on refined sunflower oil to 22.5% from 32.5%.
The cuts make it cheaper for Indian processors to import crude oil and refine it domestically. Nepalese processors, meanwhile, import crude oil from third countries, bring it into Nepal through seaports and overland routes, process it and export the refined product to India. A narrower tariff advantage could therefore undermine the economics of that business model.
India’s duty cuts create an opportunity for Nepali traders to capitalise on the duty-free provision under the South Asian Free Trade Area (SAFTA) agreement. Under the arrangement, finished goods exported from Nepal to India are exempt from tariffs.
Nepali traders import crude or semi-processed edible oils from countries such as Malaysia, Indonesia and Ukraine at minimal tariffs, refine them and export the finished products to India.
The timing is significant. Nepal’s edible-oil exports had accelerated sharply at the start of fiscal year 2026/27. Exports of soybean, palm and sunflower oil rose by nearly 75% in the first two months from a year earlier to more than Rs 40.64 billion, according to the Department of Customs. They stood at Rs 23.17 billion in the same period of fiscal 2025/26.
The three products accounted for 53.1% of Nepal’s total merchandise exports during the period, underscoring the country’s growing dependence on a narrow group of products for export growth.
The free trade agreement between Ukraine and Turkey, which entered into force on October 1, provides for an annual quota for duty-free exports of Ukrainian sunflower seed to Turkey.
The quota is set at 50 thsd tons per year. Within this volume, Ukrainian exporters will be able to ship sunflower seed without paying Ukraine’s export duty, which normally stands at 10%.
The quota will be allocated on a first-come, first-served basis. Duty-free access will therefore depend on the order in which shipments are registered within the available quota.
Exports above the 50 thsd ton quota will remain subject to Ukraine’s 10% export duty.
The exemption applies only to Ukraine’s export duty. Import duties and other taxation applied to sunflower seed in Turkey are regulated separately.
MUMBAI: Global vegetable oil prices may rise in the coming months and into 2027 on tighter supply as disrupted Black Sea sunflower-oil shipments coincide with declining South American soyoil exports, a leading industry analyst said on Thursday.
Sunflower oil shipments from Russia and Ukraine would be around 300,000-350,000 metric tons below potential each month from October if a safe shipping corridor is not established, said Thomas Mielke, executive director of Hamburg-based forecaster Oil World.
India is likely to be among the countries most affected by the disruption, possibly having to increase its palm oil purchases to secure supplies if Black Sea shipments remain delayed, he said on the sidelines of the Globoil conference in Mumbai.
MUMBAI: India's sunflower oil imports are likely to rise 30% in the 2026/27 marketing year to 3.5 million metric tons, as a cut in import duties has lowered prices and boosted demand, the head of a leading industry body told Reuters on Wednesday.
The surge in sunflower oil imports is expected to reduce soyoil purchases by 10.7% to 5 million tons in the next marketing year starting from November 1, said Angshu Mallick, president of the Solvent Extractors' Association of India (SEA).
"Because of the duty cut, sunflower oil is now more affordable for consumers. The duty reduction is expected to boost consumption," Mallick said on the sidelines of the Globoil conference.
India last week cut the basic import duty on crude sunflower oil to zero from 10%.
Palm oil imports in the new year are likely to remain steady at around 8 million tons, although purchases could be affected by rising prices amid concerns over supplies due to the El Nino weather pattern, he said.
Palm oil could trade at a premium to soyoil in 2027 as El Nino threatens production and rising biodiesel demand in top exporter Indonesia tightens supplies, Eddy Martono, chairman of the Indonesian Palm Oil Association, said on Tuesday.
India meets nearly two-thirds of its vegetable oil demand through imports, mainly palm oil, soyoil and sunflower oil from Malaysia, Indonesia, Argentina, Russia and Ukraine.
India's total vegetable oil imports are likely to remain largely steady at 16.5 million to 17 million tons in the 2026/27 marketing year, although purchases could rise by 1 million tons if lower rainfall affects the domestic rapeseed crop, he said.
Rapeseed is the main winter-sown oilseed crop in India with an oil content of nearly 40%, and typically plays a key role in determining the country's edible oil supplies.
The northwestern state of Rajasthan, which accounts for nearly half of India's rapeseed production, received 22% less rainfall than average during the June-September monsoon season.
The Taiwanese government has extended import tariff and business tax cuts on selected agricultural commodity imports including soyabeans and butter, the US Department of Agriculture (USDA) reported.
Originally set to expire at the end of September 2026, the cuts had now been extended until 31 March 2027, the USDA’s Foreign Agricultural Service (FAS) report said.
The programme, first implemented in December 2021, was intended to ease import costs for domestic businesses and limit international commodity price volatility being passed on to Taiwanese consumers.
Announced on 16 September, the measures included full waivers on business tax for soyabeans and 50% tariff reductions on butter (from 5% to 2.5%) and anhydrous milk fat (8% to 4%).
Full business tax waivers continued for corn and wheat and import tariffs for beef and milk powder for baking were also reduced.
Taiwan is heavily reliant on imports to meet domestic demand for corn, soyabeans, wheat and beef, and the extension of the measures was made in response to renewed Middle East volatility, with Brent crude reaching US$130.54/barrel on 15 September, up more than 80% since late February 2026, according to the 18 September report.
“The government is continuing the tariff and tax reductions to help limit additional price pressures on consumers and businesses,” the USDA said.
The 18th wave of cuts was part of the government’s wider seven-pillar price stabilisation strategy, in place since February 2026, which also included measures related to energy supply and pricing.
Relevant Taiwanese government ministries had been asked to monitor international market conditions and adjust policy tools as necessary to limit the effect of external volatility on domestic prices, the report said.
BEIJING/SINGAPORE: China’s soybean buying is likely to decline in the months ahead due to weak animal feed demand and negative crush margins, leaving little room for US cargoes as they were excluded from proposed tariff relief after last week’s Washington summit.
China is set to lower tariffs on a broad range of US farm products, but soybeans, its biggest US agricultural import, were excluded from the tariff reduction list following the talks between Chinese President Xi Jinping and US President Donald Trump.
Private oilseed processors in China, the world’s biggest soybean importer, have covered most of their needs through the Lunar New Year in early February with supplies from Brazil, Argentina and state reserves, traders and crushers said.
“We have booked for all of October and much of November shipments from Brazil and Argentina,” said a senior executive at a Chinese oilseed processing company.
“Most of these cargoes will arrive around the high demand Chinese New Year period. We are not interested in making further purchases as these will incur losses.”
Chinese state-run companies have bought around 13.7 million metric tons of US soybeans, which are currently being harvested, following a trade deal between the two countries in May, said three Asia-based agricultural traders who spoke on condition of anonymity.
However, private crushers have taken only South American shipments, the traders said.
US soybeans still face an additional 10% tariff since the start last year of a trade war between Beijing and Washington, making them uneconomical for commercial buyers.
Brazilian soybeans were quoted this week at par with US cargoes, excluding the tariffs, at around $590 per ton, including cost and freight, according to the senior Chinese crushing executive and an Asian-based trader.
Global sunflowerseed production could increase to 62.1M tonnes in 2026/27 – up around 10% on the previous season – mainly due to higher production in the Black Sea region, according to International Grains Council (IGC) data reported by Germany’s Union for the Promotion of Plants and Protein (UFOP).
Russia was expected to reach a new record high, with a projected planted area of 12M ha and an 8% increase in output, according to the 25 September report.
“Continued ample demand for sunflower products both in Russia and abroad has led to a 70% expansion in sunflowerseed area within 10 years,” UFOP said.
According to IGC estimates, Russian production would reach a record 21M tonnes, up from 17.5M tonnes the previous year, due to favourable growing conditions.
Production in Ukraine, the world’s second-largest sunflowerseed-producing country, was expected to increase by around 11% to 13.5M tonnes.
According to research by Agrarmarkt Informations-Gesellschaft, Argentina’s sunflowerseed planted area would remain unchanged with yields in line with the trend and production was expected to reach the previous year’s 7.5M tonnes.
Ukraine has shipped its first vessel carrying sunflower seed to Turkey in the 2026/27 season amid more active export trade. Turkish importers have already covered their October needs and are now mainly looking for cargoes for November–December delivery.
Export prices for Ukrainian sunflower seed have declined over the past week. While earlier deals for delivery to the Marmara region were reported at around $640/t, sales emerged late last week at about $618/t.
Bulgarian buyers have also lowered their bids by €5–8/t. This is increasing competition between the main export destinations for Ukrainian sunflower seed.
At the same time, the issue of minimum export prices used for customs clearance remains unresolved for Ukrainian exporters. Market participants are waiting either for the introduction of a reduction coefficient or for a new price table expected to be published on October 10.
After the first vessel arrives in Turkey, market participants also expect more clarity on cargo clearance procedures at Turkish ports. Last season, there were cases when additional quality issues were raised after cargoes arrived in Turkey.