Soyabean Oil is the leading vegetable oil traded in the international markets, next only to palm. Palm and Soyabean oils together constitute around 68% global edible oil trade volume, with soyabean oil constituting 22.85%. During the last decade, volume of soyabean oil exported has grown at the rate of 4.05%. It accounts for nearly 25% of the World's total oils and fats production. Globally, production of soyabean oil has grown at the rate of 5.8% during the last decade. Increasing price competitiveness, and aggressive cultivation and promotion from the major producing nations have given way to widespread soy oil growth- both in terms of production as well as consumption. Argentina, Brazil, China and India along with US are the major contributors for the growth.

While US has a strong domestic consumption base and mostly exports soyabean in addition to oil, Argentina and Brazil exports much of their production, mostly in the form of crude oil. China and India, though being producers themselves, import soyabean/its derivatives to cater to their expanding consumer base. While China imports both bean and oil, India allows only imports of oil.

Global consumption shot up to 29.38 million tons in 2001-02, growing at the rate of 5.76% during the past decade. Notable upward movement in consumption in soyaoil is being seen in EU, Central Europe, Russia, Egypt, Morocco, US, Mexico, Brazil, China and India.

Soyabeanoil is the derivative of soyabean. On crushing mature beans, 18% oil and 78-80% meal is obtained. While the oil is mainly used for human consumption, meal serves as the main source of protein in animal feeds.

India is the World's largest importer of edible oils in the World. Of the total 5.0-5.5 million tons of vegetable oils imported, 1.3-1.5 million tons is soyabean oil, imported mostly form Argentina, and followed by Brazil and US. In addition to imports, domestic production of around 0.7-0.8 million tons takes the annual soyabean oil consumption of the country to 2.0-2.2 million tons, with a market value of Rs 8000 crore.

Crude and Refined soyabean oils are permitted to be imported into India at an import duty of 45% and 50.4% respectively. Imports of soyabean oil into India have been on a continuous rise since the past 6-7 years. It has witnessed a sharp rise from a mere 84,000 tons during 1996-97 to 1.54 million tons during 2001-02.

Indian edible oil market is highly price sensitive in nature. Hence, the quantity of soyabean oil imports mainly depends on the price competitiveness of soyabean oil vis-à-vis its sole competitor, palm oil. This also implies that soyabean oil prices are highly influenced by palm oil prices in Malaysia, the market leader in palm oil production and exports.

In India, ready (spot) markets of Indore and Mumbai serve as the 'reference' market for soyabean oil prices. While the Indore price reflects the domestically crushed soybean oil (refined and solvent extracted), Mumbai price indicates the imported soy oil price. Futures trading in soyabean oil is also prevalent in many futures exchanges in the country, the prices of which are largely influenced by the international edible price movements (especially Malaysian palm oil and soyabean oil at CBOT), soyabean availability in domestic markets, demand for meal and other associated supply-demand factors of soyabean and its derivatives.

Soyabean oil is among the most vibrant commodities in terms of 'price volatility'. Its prominence in the international edible trade scene (9-10 million tons), concentration of production base in limited countries as against its widespread consumption base, its close link with several of its substitutes and its base raw material (soyabean) in addition to its co-derivative (soya meal), the nature of the existing supply and value chain, etc throw tremendous opportunity for 'trade' in this commodity. The opportunity is further enhanced by the expected rise in consumption base and the consequent increase in imports of vegetable oils in the years to come.

Futures trading in soyabean oil would essentially serve as the right tool for hedging market-linked risk by all those in the value chain of the commodity- the soyabean producing farmers, processors, brokers, speculators, soyabean and meal traders, traders of other oilseeds and oils, etc.

Soybean oil is a very healthy food ingredient despite the bad publicity regarding fats and oils in general. Soybean oil does not contain much saturated fat. Saturated fat causes heart diseases and is mainly found in products from animal origin. Soybean oil is also used by the food industry in a variety of food products including salad dressings, sandwich spreads, margarine, bread, mayonnaise, non-dairy coffee creamers and and snack foods.

Soybean oil contains natural antioxidants which remain in the oil even after extraction. These antioxidants help to prevent the oxidative rancidity.