However, the department for sugar and edible oil denied the charge saying there is no reason for trade to be paralysed in view of the government's statement.

"Edible oil trade has become wayward and government's failure to follow up its statement with a finance ministry notification has created uncertainty in domestic market," Malaysian palm oil promotion council's India representative Ashima Raheja said on Friday.

"It is obvious that the move to come up with a statement and not follow it up, is to reduce prices," she said.

J Choudhary, secretary, sugar and edible oils, wondered why trade was troubled if the government did not follow up its announcement with a notification.

"We cannot understand why trade should be bothered if the notification has not followed our statement," he said.

Last week, the department of sugar and edible oil said the government had initiated the process to cut edible oil import duty by 10 to 15 per cent which could lead to prices of imported oil dipping by Rs 3000 a tonne.

Vanaspati manufacturers association of India executive director SL Chadha said trade had been paralysed in view of the government's failure to issue the notification.

"No buyer or seller has been able to contract the consignment in view of the statement. There is no arrival and some consignments have been held up at the customs in anticipation of the notification," he said.

"What is troubling them from entering into contracts? if there is a duty cut, prices will be adjusted accordingly," Choudhary said.

Chadha warned that trade would totally collapse if the government does not issue the notification immediately.

Raheja said importers had stopped taking delivery of the shipment awaiting the duty cut notification, while huge stocks had been held at high seas.

"Many importers have been put to financial losses due to payment of demurrage," she said.

Chadha said the government's plan was to reduce domestic prices without resorting to large scale imports.

However, trade sounds positive on the move to cut import duty.

"Government's plan to brind down the duty is a right step," leading oil trader kishen das khairatilal said.

Raheja said Malaysian rbd palmolein price had sobered by 15 to 20 US. Dollars (Rs 620-800) since the beginning of the week following developments in Indonesia, the world's largest palmolein supplier.

"It is in the interest of consumers, farmers and industry that prices are maintained and no undue inflation occurs," she said.

Palmolein prices, which ruled at 700 dollars (Rs 28,000) last month, increased to 780 dollars (Rs 31,500) early this month.

Global palmolein prices have been rising in view of a projected shortfall in Malaysian palm oil production and reduced supplies from riot-hit Indonesia.

On the other hand, domestic edible oil prices have flared up since beginning of the year on steep fall in oilseeds production, especially that of rapeseed and mustard.

Raheja said while the government wanted to have free trade on one hand it was not ready to give total operational freedom to traders.

Choudhary said steps initiated by the government had yielded results with prices dipping by Rs 2000 a tonne.

"Our objective is to ensure fair prices. And that is being ensured," he said.