The market has been sandwiched between contradictory factors. While the inventory of RBD palm oil is estimated around 30,000 tonnes, at Mumbai, demand continued remains shy. Approximately 1,00,000 tonnes palm oils is expect to hit the Indian shores in the next couple of week, which is forcing buyers to sell the oil at a disparity.

According to a leading importer, there is hardly a taker for the imported oil. A stage-managed rumors of hike in the import duty and such reports induce some shortly lived spikes. In the last week RBD palm oil flared up to Rs 225 but prices fell to Rs 218 in the fag end of the week. Most of the imports especially those who are multinational trader are selling the oil at a disparity of Rs 5 to Rs 7 per 10 kg. While the landing cost of the RBD palm oil is estimated around Rs 224 - Rs 227, most of the traders are selling the oil around Rs 218 - Rs 220 per 10 kg. A couple of leading global traders are offering the cheaper cottonwash and palm oil at much lower rates.

Having a facility to manage their risk in the futures as well as large infrastructure and trading knowledge, these traders holds competitive edge over their Indian counter parts.

According to a leading oil analyst, the situation of the oil trade in general is likely to deteriorate, as market has been flooded with the imported oils. While the price war between top palm oil producers, Malaysia and Indonesia is impending on the Indian oil trade, a resumption of cottonwash oil from Australia, surging imports of sunflower and soya degum from Latin America are just adding the woes.

A global trader, headquartered at Lucerne, Switzerland has started importing cottonwash oil from Brisbane, Australia and he is offering oil around Rs 239 a 10 kg. A leading US based trader operating from Kakinaada and Mumbai is offering cottonwash oil at Rs 235 plus tax for Mumbai. While the domestic prices are ruling around Rs 250 per 10 kg, imported oils are quoted much lower. Though the overseas traders and Indian importers have become extremely cautious in the deals, still the payment conditions are not good. An Indian importer has recently defrauded leading Dutch Bank. A low profile Dutch Bank who is also in the same line of business, ie Warehouse financing also suffered some loses from the edible oil financing. Most of the overseas traders have stopped issuing suppliers credit to the Indian importers, while Indian importers are also insisting for the cash basis deal with the resale havala holders. It is a crisis of confidence.

Though the trade is seen normal, a hake out cannot be ruled out. Current state of affairs indicates that a storm is brewing. The only ray of hope is dramatic improvement in the global prices as well as demand. Meanwhile prospects for the 2000-2001 oilseeds crop is seen bright.

Standing soya and groundnut crop in MP and Gujarat is reported better. According to a leading trader, the Soya crop in the MP is developing well. After the flowering, the pod setting is also near completion. Traders pegged initial estimates for the new crop at about 55 lakh tonnes as against last year's 52 lakh tonnes.

The sowing has been reported in 56.5 lakh hectares in compared with 56.4 million tonnes in the previous year. Groundnut crop in the Gujarat is estimated around 12 lakh tonnes, up by 4 lakh tonnes from the previous year's 4 lakh tonnes. The yield as well as output may further improve, if crop receives a one more spell of monsoon showers, said a leading trader of Rajkot. Global Outlook: US soya crop seen at record high Despite a forecast of a record soya crop at USA, CBOT Soya prices discounted the fundamentals. Prices of November futures shot up to $5.05, showing a sharp rise of 12 cents a bushel. A prolong dry spell in the US Midwest and Delta region prompted nervous short covering in the near by contracts. A strong crushing reports and renewed buying from the China also aided the rally. Taking cue from the CBOT. Crude Palm Oil -CPO futures at COMEX, Malaysia also posted a sharp rebound. (Author works with emecklai. The views expressed in the article are his own and not of the organization he works for)Benchmark Crude futures closed above 1,000 RM, showing a sharp rise of 50 RM from the recent low of 950 RM. The nervous shorts were seen covering their positions amid uncertainty over duty reduction on CPO as well as firm trend of CBOT. As per private trade estimate, New soya crop in the USA is likely to touch 2.99 billion bushel, (one bushel is equivalent to 27.18 kg), up by 13 per cent from the previous years crop. Yield per acre has been estimated around 40.70, a six-year high, according US Department of Agriculture.