For instance, in the Haryana forward deals of mustard oil, 15-30 March delivery quoted at Rs 270 per 10 kg on Friday. Fresh devaluation of Real could be the another blow for the trade, because already cheaper oil imports will now become dirt cheap. Real was quoted at 1.73 on last Friday.

Traders feel that if oil prices continue to fell, it may create payment crisis. Current state is a fall out of the over-trading that is going on. To make a fast buck in the post-dropsy bull run, which began in late 1998, several importers have made huge import commitments. During that time edible oil prices skyrocketed. Ground nut oil rose to Rs 630 an all time high.

Palm oil rose to Rs 400. Some overseas oil firms also joined in the import bandwagon. They had sold edible oils on an afloat basis. In such deals buyer has no responsibility to sell the sent goods. Currentlysubstantial stock of such oil is lying idle on various ports. In addition bumper ravi crop of mustard is expected to hit the market in the next month. All this factor is leading toward supply overhang, feel, traders.

``Latin America holds the key, for future direction of edible oil prices. Brazil and Argentina are key exporting countries. Devaluation of Real would pressure another currencies of sub continent including Peso of Argentina, a major exporter of soya and sunflower oil,'' said an analyst.

Current bear market is result of several factors. Looking in the recent past, domestic availability of oils has been increased due to good monsoon, On the other hand inflow of imported oil has been continued. As a result there is huge supply but few taker. it's a buyers market.

Exploiting the situation some unscrupulous traders, those who had bought oil at higher prices in forward deals, are now avoiding delivery. Some traders known as Havala Holder are not fulfilling the commitments.

``Bumper ravi crop canonly worsen the situation. Ravi mustard crop is expected to hit the market in the next month. In anticipation of it cottonseed oil prices tumbled across the board. In the Ganganagar mandi cottonseed oil fell to Rs 315 per 10 kg. In the Gujarat it was quote around Rs 295-300. In Akoala it was quoted at Rs 290. In the Indore, soya refine oil fell to Rs 320, while solvent price slided to Rs 300'' said a trader.

``In the forward market, parallel futures crashed. The cotton wash future traded at Ganganagar fell to Rs 317. Soya future at Indore fell to Rs 327. Ravi crop of Rape seed and mustard seed seen record high. Gujarat alone is expected to reap 75 lakh bags of 70 kg of rape seed.'' he added.

Global prices of edible oils also likely to fall due to Real Factor. At present Palm oil in Malaysia quoted around Cheaper exports from Brazil and liberal import from Indonesia will pressure Malaysian palm oil. Australia and Canada seen major exporter of kanola (one kind of rapeseed). All this factor can lead toprice war among exporting countries. Among imported crude edible oils, Sunflower oil is sold at as low as Rs 270. Soya degum quoted at Rs 290 per 10 kg. Following real's fresh devaluation landed cost of imported soya deguam will decrease further. Importers do not want to reveal the actual figure but landed cost of imported sunflower oil could be as low as Rs 250, said an insider.

According to an insider there are problems in the forward deals. Those who have bought oil in the forward markets are not lifting the goods. Which may result in payment crisis. Most of the importers have burnt their fingers in the forward deal with Resale HAVALA holder, but they remain tight leaped.

Meanwhile there are rumors in the market that import duty on edible oils will be hiked in the next budget. Government may hike the import duty as there is ample supply of oils. Several trade bodies have urged to government that duty should be hike to protect interest of domestic oil processors and farmers.