The Indian palm olein oil imports, which in past years accounted for 70 per cent of total edible oil imports, were expected to fall sharply in the current oil season as soft oil imports were working out to be relatively cheaper. "In the past years imports of palm olein and soft oils were in the ratio 70:30," said BV Mehta, executive director of the Solvent Extractors' Association of India (SEAI). "This year, the ratio is turning out to be 45:55." Traders said palm olein oil imports from Malaysia cost Indian importers about $525 per tonne at Indian ports, while imports of crude soft oils cost between $442 and $426 a tonne at Indian ports. After adding $50 for refining, it would still cost less than $500 a tonne.

"The net effect is that, even if we refine the soft oils here, it is working out to be much cheaper,"Mehta said.

Trade officials said low global prices and expectations of a bumper summer oilseeds crop were expected to keep domestic oilseeds prices depressed for at least the next two months. "Prices are going down and down," said sources.Traders said palm olein in domestic markets was quoted at Rs 27,500 ($647) a tonne, down from Rs 31,500 a week ago. Agriculture minister Sompal expects the 1998/99 (July-June) oilseeds output to exceed 25 million tonnes, compared with 22.0 million tonnes in the previous year. "The summer crop is turning out to be very good," said sources of Indian Oilseeds and Produce Exporters' Association.