``The fall in Malaysian palm oil prices below 400 dollars a tonne has made it attractive to Indian buyers and it is bound to regain its lost position as the major imported edible oil,'' Manshu Bhai Patel of Velani Traders told PTI.

Palm oil, which used to form nearly 85 per cent of India's total vegetable oil imports, had lost favour with Indian buyers as soft oils like soyaoil and sunflower oil from South American countries like Brazil and Argentina were cheaper during 1998-99.

The share of palm oil in Indian imports of nearly 25 lakh tonnes is estimated to have declined to 55 per cent during 1998-99 as more and more buyers preferred cheap soft oils.

``Despite the fall in share of total imports, Malaysia has been able to raise its volume of exports to India last year,'' Malaysian Pal Oil Promotion Council(MPOPC) country representative Ashima Raheja said.

Malaysian palm oil imports constituted nearly 68 per cent of the total edible oil imports of about 13.9 lakh tonnes during January-May this year, she said.

According to MPOPC Indian imports of palm oil more than doubled to 9.62 lakh tonnes in January-May this year from 4.62 lakh tonnes imported last year.

Raheja said palm oil was bound to continue as the major edible oil for India because of its wide range application and cost factor.

``Proximity of Malaysian markets to India and nutritional value of palm oil will help it continue to be the major imported oil,'' she said.

India, which is faced with an annual demand-supply gap of nearly 15 lakh tonnes, meets the demand mainly through imports of refined edible oils.

Indonesia's decision to slash the export duty further by 10 per cent last week would also make palm oil a more attractive proposition to Indians, Ashima said.

However, the Indian traders and importers are currently faced with excesssupply line and are cancelling contracts or seeking deferment of deliveries, industry sources said.

Domestic prices of major edible oils have fallen nearly 35 per cent during the last four months following excess imports and a better oilseed production.

According to industry sources, prices are expected to remain subdued until the holding stocks are disposed of.

``Prices will continue to remain under pressure till the current stocks are sold off,'' Patel said.

He said the importers were not effecting any new purchases as a number of them who had booked huge quantity earlier were not able to sell the stocks.

Patel said the low domestic prices had also forced farmers to hold back around 35 to 40 per cent of their soyabean and mustard crop during the current year.