Uruguay targets India’s edible-oil market as import costs rise
Uruguay is developing soybean and sunflower oil production with India in view as a future market. Its prospects will depend on expanding cultivation and processing capacity while competing with established suppliers such as Argentina, Indonesia, Malaysia and Brazil.
Uruguay looks to Argentina’s export model
Uruguay is developing its oilseed and edible-oil sector with the aim of supplying India, seeking to diversify agricultural exports and emulate Argentina’s success in the market. Alberto Antonio Guani Amarilla, Uruguay’s ambassador, told Mint that current production remains very low but that India is being treated as a future destination.
The country intends to focus on soybean and sunflower oils. Amarilla said Uruguay is learning from Argentina as it considers how to build enough production capacity for India’s large market. Argentina has supplied India with vegetable oils for about two decades and remains the benchmark for Uruguay’s strategy.
Commerce ministry data cited by Mint show that Argentina exported $3.66 billion of edible oil to India in FY26, ahead of Indonesia at $3.48 billion and Malaysia at $2.94 billion. In 2025, half of Argentina’s vegetable-oil exports went to India, according to Hari Seshasayee, a visiting fellow at the Observer Research Foundation.
India’s import dependence creates an opening
India consumes about 26 million tonnes of edible oil annually, representing a domestic market worth $34.75 billion, according to the Solvent Extractors’ Association of India. Domestic production covers only up to 40% of demand. The country imports soybean oil from Argentina and Brazil, palm oil from Indonesia and Malaysia, and sunflower oil from Ukraine and Russia.
Higher prices are increasing the cost of this dependence. Consumer ministry data show that prices of major edible oils, including mustard, groundnut, soybean, palm and sunflower oil, rose by ₹14-31 per kg over the past year. India’s palm oil imports increased 12% to $9.6 billion in FY26, while soybean oil imports climbed 23% to $6.2 billion.
India imported $3.25 billion of crude sunflower oil in FY26, down 11.25% year on year, although purchases from Argentina surged 158% to $817.57 million. Crude soybean oil imports rose 12.75% to $5.25 billion from $4.66 billion. Argentina supplied $2.84 billion, or about 54% of the total, while Brazil accounted for $1.02 billion.
Scale, logistics and policy will determine viability
Uruguay is starting from a small base. Companies including Alcoholes del Uruguay have begun exporting soybean and canola oil, shipping 11,000 tonnes to Chile and Bangladesh in August 2025. Uruguay’s exports to India stand at about $80 million and consist mainly of timber and wood products, while total bilateral trade reached $527.37 million in FY26.
BV Mehta, executive director of the Solvent Extractors’ Association of India, told Mint that Uruguay could become another supplier if it expands oilseed cultivation and processing capacity. Delhi-based trader Dharam Pal Gupta said commercial prospects will ultimately depend on production costs, prices, logistics and competitiveness in India.
Uruguay must also account for India’s domestic production policy. New Delhi aims to achieve edible-oil self-sufficiency by FY31 by expanding oil-palm plantations and raising oilseed production from 39 million tonnes to 69.7 million tonnes. A successful Uruguayan entry would therefore require competitive supply at scale while India simultaneously works to reduce its import dependence.
