On the contrary, suppliers of the Malaysian palm oil seem to have been fast enough to raise their prices, partly because of the possibility of lower availability of edible oils in the country, and partly because of the contamination of Indonesian palm oil shipped to European countries. India is one of the largest buyers of palm oil from Malaysia.

Last Friday, Malaysian palm ended higher. The third-month February 2000 futures contract closed up 6 ringgit at 1,229 ringgit ($320.79) a tonne after trading between 1,217 ringitt and 1,236 ringitt. Traders pegged next support for February futures contract at 1,250 ringgit, with strong support seen at 1,200.

Even physical palm oil prices ended slightly higher after trading in a narrow range, with lack of demand for refinedproducts limiting gains.Volume was thin ahead of a long weekend. The market will be closed on Monday for Malaysia's general election.

On November 20, minister for consumer affairs and public distribution Shanta Kumar, inagurating the 37th All India Convention of Oilseeds Oils, trade and Industry in Indore, had promised that "the government will announce within few days a rationalised import duty structure", indicating rise in import duty for edible oils. That the Government has not announced any rationalisation during the week's time is a different story.

On the next day (Sunday, November 21), the Central Organisation for Oil Industry & Trade (COOIT) president Govindbhai G Patel officially released the estimate of production and marketable surplus for crushing of kharif oilseeds crops.

The figures indicated that kharif oilseeds crop for 1999-2000 is expected to be at 165.80 lakh tonnes, 20-per cent lower from last year's 193.6 lakh tonnes.

Participants at the oilseeds convention had feared that boththese points were sufficient enough for the edible oil traders to raise their prices, at least for two reasons.

One, the total availability of edible oil from the lower kharif crop would be lower at 37 lakh tonnes, a huge 6.6 lakh tonnes lower from last kharif's 43.6 lakh tonnes.

Two, the promised hike in import duty on edible oils would technically result in lower imports of palm from the neighbouring countries like Malaysia and Indonesia.

Nothing of this feared price hike resulted on the domestic front during the week ended November 27, as currently there is a huge stock of five lakh tonnes of imported oil said to be lying unsold with the traders. Before any price hike is attempted, traders need to get rid of their stocks.

Said Shanta Kumar in Indore: "Higher import of edible oils (40 lakh tonnes) at cheaper import duty (of 15 per cent) is a matter of serious concern for the government.

The government is very much concerned about the likely edible oil scenario in the coming months... Whilerecognising the shortage of raw material (oilseeds) we are currently having a thorough look at the duty structure of edible oils and refined oils and I can assure you of a decision in the matter soon, which will be in the best interest of the country, harmonising the interest of consumers, farmers and processors".