Cheaper edible oils through imports have prevented the prices from appreciating this year and the prices are substantially lower than the previous year's levels.

Usually prices soar 15 to 20 per cent during festive seasons. Barring few blips on fears of inadequate rains, edible oil prices have been largely calm. Groundnut oil prices last week pierced the psychological level of Rs 400 per 10 kg, despite little hopes in crop improvement, with the end of the rainy season. The premium cooking medium is currently quoted at around Rs 390 to Rs 392 in Mumbai.

Imported palmoil prices, which inched to Rs 212 per 10 kg on last Thursday, have been sluggish at around Rs 210 levels and will most likely ease further, depending upon the arrival of the first batch of 5,000 tonne each of the two lakh tonne consignment of MMTC this month.

MMTC is importing palmoil on behalf of Indian RailwayConstruction Co (IRCON) which is constructing a railway project in Malaysia. On its part, Malaysian government has agreed to repay the dues to IRCON (and therefore the government) through the supply of palmoil at market price.

Last year, for example, before the festivals began in September-October, edible oil prices rose considerably wherein groundnut oil had jumped to Rs 630 for 10 kg on October 16 from around Rs 500 on August 1, 1998. Soyabean crossed Rs 400 from around Rs 380 and both palm and rapeseed oil had reached Rs 395 levels from around Rs 350. The usual pre-festival price trend history prompted retailers to advise clients to speed up purchases. There are also other consignments, in addition to MMTC's, of edible oils contracted earlier by various importers, who are awaiting port clearance. This is to meet the temporary surge in demand for edible oils during the festive-period, which begin this month.

In September, punters and wholesalers pushed up groundnut oil prices to Rs 435, blaming it oninadequate rains in the crop producing regions of Gujarat and Andhra Pradesh. The late season rains have improved the groundnut crop prospects, though marginally, which would result in the supply of a better quality of groundnut for production of oil. Wholesalers, traders and importers deny any possibility of price rise during the festive seasons.

"The lower import duty has helped the traders to flood the country with edible oils," said an edible oil importer. "The sheer quantity coming in each month is unlikely to warrant any price rise."

Sources said that the edible oil imports in October are likely to cross six lakh tonnes, highest in recent months, taking the overall edible oil imports this oil year to over four million tonne. This is due to the lower import duty of 15 per cent and more than sufficient supplies of edible oil in the international markets, they added.

The international palmoil price is ranging between $380 per tonne (FOB) and $405 per tonne (C&F Indian ports). There is a possibilitythat by the time the MMTC consignment arrives the prices would be subdued further.

Lastly, a section of the edible oil traders feel that once the new government is in place with a sizeable majority, it may be emboldened to raise the import duty on finished product (edible oils), partly to pacify the oilseed extractors' lobby which has been demanding `rationalising' of the duty structure and good returns to oilseed growers.