"If current market trend is any indication, the 36-month long sectoral mega bear market in the oilseed complex is about end soon'' said a leading oil analyst.

Further, the local edible oils market is seen bottoming out after the steep hike in the import duty in the India. Commex palm oil futures and CBOT soya futures held the ground, indicating underlying buoyancy. Following India's move the CPO was expected to fall, but on the contrary it has gained, the analyst said. The CBOT soya oil futures also posted an eight-month high.

Palm oil prices have flared up by Rs 20 to Rs 235 in just three trading sessions. The move came as a shot in the arm for the beleaguered domestic oil processors who were under pressure from rising cheaper imports. Trade observes had expected that Malaysian prices would go down after the steep hike in the import duty. However the Malaysian players seem to have absorbed the news of import duty hike.

``After the recent hike in the duty, landed cost of edible oil will sharply increase. A sharp fall in the Ravi mustard production and supply short fall in the soya oil may fuel the sentiments further,'' said Prem Das, commodity trader at Visual Exports. While the move has been hailed by the edible oil trade, consumers would start feeling the pinch of higher import duty in the form of higher prices for the cooking medium.

Following the recent devastating earthquake in Gujarat, and draught like conditions in the other adjoining parts of the country, the purchasing power of the consumers has been diminishing. "The rise in the edible oil prices would aggravate their woes,'' feel market observers.

``Given the overall economic conditions, marginal and poor seed farmers are unlikely to benefit from the move, and they would be forced to sell their seeds at uneconomical levels. Only bigh importers, and rich farmers could benefit at the cost of consumer and poor farmers,'' said an analyst. The current year's oilseeds crop is the lowest in the decade. It touched 6.6 mn tn, much below the the peak level of 25.2 mn tn recorded in 1998-99. The duty hike move is also not in line with the global integration. While the global commodity prices were falling, India cannot be seen to be an exception to the rising edible oil prices. By hiking the duty, the finance minister has in a way disassociated Indian veg oil industry from the global veg oil markets.

"It may provide a temporary boost to the prices, but it is not a solution, for main problem lies in the lower oilseeds production and overall efficiency,'' the analyst quipped.

After two year's of mega bear market took prices to a nadir, edible oils market may witness an end of the sectoral bear market. RBD palm oil prices have fallen to Rs 190 just recently, from the 1998 peak of Rs 410 a 10 kg. Domestic oil prices posted sharp rise in the last week. RBD palm oil spurted by Rs 30 a 10 kg, while cottonwash, soya refine and groundnut oil rose by Rs 15, Rs 25 and Rs 15 a 10 kg respectively.

Reflecting the bullish trend soya April futures traded at Indore rose to Rs 266 a 10 kg on the very next day of budget, a hefty rise of Rs 16 a 10 kg in just one session. The futures were last quoted around Rs 263 a 10 kg, basis April 2001.

Among spot markets, recovery is seen relatively lagging. Although prices are firming up, volume was reported relatively lower. Cottonwash prices at Akola were quoted around Rs 240 a 10 kg. Groundnut prices at Mumbai and Adoni-prductur rallied by Rs 15 to Rs 315 a 10 kg, however remained for other edible oils. Traders are seen in the wait and watch room, however sentiment is bullish.

Meanwhile arrivals of Ravi mustard seeds and Kharif soya are seen bolow average. Ravi mustard-Rapeseed crop is reportedly en lower, however there is significant inventory of mustard in Gujaat and Rajasthan which may check the rally. On the overseas front, Soya oil prices flared up to 16.33 cents an lb amid further fall in the inventory. CBOY may mean futures ending higher at $4.60 according to the reports of reported buying from China. Market is seemed to be discounted the crop story of record Soya crop in the Latin America. CPO futures at CCMMEX closed the morning session slightly higher ahead of Commex's price outlook forum. There are reports saying is intervening through the State-run agency Felta and planning to put a support level price also aided the rise, though technical short covering seems to be over. Indian traders do not expect imports to come down though the composition of imports may come down.

Benchmark May future was last quoted at 783 RM ($206.05) a ton after trading as high as 786. Volume estimated at 637 lots. Physical March was offered at 750 RM a ton and deals were reported at 745 RM a ton. (The author works for e-Mecklai. Views expressed here are his own)