U.S. soybean oil futures climbed more than 2% on Tuesday after President Donald Trump unexpectedly announced a trade deal with India, in a sign of optimism that a truce could open the way for billions of dollars of American products to hit the world’s most populous nation.
India is a major producer of staple crops, but vegetable oil is one of the few major farm products it imports in significant volumes. Shortly after Trump posted the news — confirmed by Prime Minister Narendra Modi — soybean oil’s premium to Malaysia palm oil widened to the most in over a week.
Detail, however, remains scant. As part of the pact, Trump said India has agreed to buy over $500 billion of US products, including agriculture — but gave no breakdown. The sector had been a sticking point during the months of negotiations, as New Delhi sought to protect the farmers that account for nearly half its workforce and attempted to negotiate around genetically modified crops, which remain mostly restricted in India.
“India’s growing population is an important market for American agricultural products and today’s deal will go a long way to reducing this deficit,” U.S. Agriculture Secretary Brooke Rollins said in a post on X.
Messages and an email to a spokesperson for India’s agriculture ministry weren’t immediately returned.
India imports upward of 16 million tons of vegetable oil a year, topping global purchases, according to U.S. Department of Agriculture data. Soybean oil could account for a larger share, compared to palm oil, after the agreement with the U.S., said Gnanasekar Thiagarajan, head of trading and hedging strategies at Kaleesuwari Intercontinental.
“India’s edible oil demand mix could gradually shift, with US soy oil potentially gaining from improved market access” said Darren Lim, vice president of commodity derivative sales at StoneX in Singapore. Still, palm oil’s entrenched supply chain and price advantage may limit losses, he said.
Most-active soy oil futures on the Chicago Board of Trade rose as much as 2.5% on Tuesday, while palm oil on Bursa Malaysia Derivatives slipped as much as 1.5%, before closing 0.3% lower. India has typically relied on South America for much of its soybean oil purchases, with the U.S. shipping some 200,000 tons in the first 11 months of 2025.
The Asian nation is largely self-sufficient in many of the other staples it depends on and leads the world in rice exports. That could temper the enthusiasm for a broader pickup in farm trade, and Chicago wheat and corn futures were little changed in early trading.
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