According to traders, at least half a dozen big players failed to honour their import commitments after global prices fell sharply. This put their Malaysian counterpart in a fix. Several Indian importers are requesting to the overseas traders for roll over of existing contracts, as there is no such facility available in the Malaysian palm trade, but Malaysian traders are not willing to meet the condition. ``There are at least four corporates on the verge of financial defaults,'' said a trader. A Pune-based importer recently has gone bust. It owed around Rs 80 crore to the market, he said.

A leading importer at Ahmedabad is near to bankruptcy, as cheques worth Rs 50 lakh issued by the company bounced recently. The group is engaged in the refining of edible oils and export of castor oils owed Rs 30crore to banks. It has stopped oil imports since last four months. An another importer also lost heavily. Having failed to receive it's due from some northern traders, it has decided to diversify into import of pulses, according market grape wine.

``The Indian oil market has never seen such a bear market in this decade. If the monsoon is normal, Indian consumers may get groundnut oil around Rs 25 per kg, and soft oil like palm oil could be available at as low as Rs 18-19 per kg, cheaper than a mineral water bottle!.''said Jayesh Shah, president Ahmedabad Commodity Exchange.

The payment crisis is being estimated around Rs 2,000 crore. The trade is going to be paralysed in the comming months, but nobody seems bothered, said an analyst. The advancement of monsoon and free fall in the global markets is likely to intensify, trading circles say. The farmers which are hoarding seeds may liquidate their holding. Storage tanks at various ports are filled to the brim with oil. This supply overhang would stem anypotential rally, feel traders. Fall in the Malaysian palm oil is likely to pressure local prices further. Importers have become very cautious in the import of palm oil. Malaysian palm oil is sold at Rs 205, Soya degum fetches Rs 205 per 10 kg.

As the global prices are headed towards malty decade lows, domestic prices are expected to crash in the near future, feels a trader.

Global markets headed southward

The RBD Palmolein at Malaysia touched to $357.50 FOB Malaysia. The August soyabean futures traded at Chicago Board of Trade- CBOT crashed to 26 years low of $4.09 in the last week. The future recovered to $4.26 due to dry spell in the midwest, but undertone seems still weak. Karmic Inc bought $4 put options. Despite lower prices, US is expected to reap 2.98 billion bushel crop, a record crop in third year in a row. Though prices ruled at 25 year low, farmers preferred to sow beans, thanks to attractive subsidies from government.