"Given the declining prices in the overseas market, traders are bound to import more, may be to meet edible oil demand in next couple of months and not for immediate consumption," said a leading oil trader. "This is likely to prompt the government to hike the import duty and get in more revenue for the country."

The spot market for imported RBD palm continued to be bearish with the prices touching seven-year low last week, in the two main exporting countries - Malaysia and Indonesia.

According to the recently set up All India Vegetable Oil and Oilseeds Importers' Association, the import of RBD palmolein has jumped in September to 158,300 tonne from a recent low of 122,800 tonne in August, but substantially low from the year's high of 232,166 tonne in January this year. Import of RBD palmoil has been fluctuating since the past few months ranging between these two levels.

However, a section of oils and oilseeds traders feel that the government may succumb to the continuous demand for increasing the import duty to over 50 per cent, from the recently increased level of around 35 per cent. The Solvent Extractors' Association (SEA) has been championing the cause of the oilseeds extraction industry, which has been reeling under the claimed burden of high unutilised capacity.

"As regards the import duty hike, both October and November months this year are a period of transition," said a top BOOE source. "Hoping that the government may hike the import duty, players do not want to sell at this stage."

This hope has kept the December futures relatively high on an otherwise sluggish and low volume BOOE. The December contract for RBD palmolein on the BOOE closed higher at Rs 205.50 for 10 kg from day's low of Rs 203. Even the November contract closed slightly higher at Rs 195 from the day's low of Rs 189. The spot RBD palmolein prices too have been bearish with continued inflow of the imported oil.

Meanwhile, according to the Solvent Extractors Association (SEA), the import of edible oil during September, 2000 is reported at 498,515 tonne. However, during the 11-month period ending September, 2000 it was placed at 3,970,880 tonnes against 3,863,358 tonnes for the same period of last year.

During the first 11 months of oil year 1999-2000, the import of RBD Palmolien has reached at 1,984,145 tonne against 2,358,504 tonne of the same period of last year. However, import of curde palm oil (CPO) has increased very fast and reported at 651,590 tonnes during November'99 to Sept'2000.