``I think government will not take a risk in changing the import duty structure before Diwali festival (in November),'' said president of Bombay Oilseeds and Oil Exchange Ltd Navinbhai Shah. Domestic traders, faced with surging imports triggered by low global prices, have been clamouring for a hike in import duties on oils and expect a quick decision from the government. India levies a 16.5 per cent duty on both refined and unrefined edible oils and 40 per cent on oilseeds. The industry has sought a 10 percentage point increase in edible oils duty and wants the duty on oilseeds imports to be cut to 5-10 per cent to help the processing industry. Shah said government officials had already recommended an increase in duties but a political decision was awaited.

``There is a case for increase in import duty on edible oil but I am not sure if the government will take the decision in the present scenario,'' said president of the Central Organisation for Oil Industry and Trade (COOIT) Govindlal Patel. ``They have increased the diesel prices. They will have to increase petrol and kerosene prices since international prices are firming. When all this is being done, government will think twice,'' he said.

But Patel said farmers will suffer if the government does not increase duties as domestic winter oilseed arrivals have started and edible oil prices are low. A Bombay-based commodity analyst said the government will take a decision only after the winter oilseeds arrivals are complete and sowing for the summer crop begins late in the year.

``There has been a setback to kharif (winter) oilseeds output. So the demand-supply gap has widened...the government will have to take a view on the price level at which consumers will be comfortable,'' he said.

India's winter oilseeds output is forecast to fall by 10-15 per cent following scanty rains and inclement weather in the growing regions. The analyst said global edible oil prices were also forecast to firm up in the first quarter of 2000 and that would push up the domestic prices.

Traders said Indian oil purchases were expected to fall in October from estimated imports of 525,000 tonnes in September, mainly on expectations of a duty increase.

``Importers are cautious about distant delivery for November and December,'' said Shah. ``Diwali demand has started but there are enough supplies.'' Patel said India's edible oil imports during the oil year 1998-99 (November-October) will touch a record 4.2 million tonnes against last year's 2.1 million tonnes. India annually consumes about 11 million tonnes of edible oil.