This, in a way, tentamounts to the abandoned market intervention operation (MIO), which, according to Kurien,"NDDB was forced to stop after Chidambaram took over as finance minister". Market sources, however, feel, NDDB was forced to abandon the MIO after incurring heavy losses.

"The NDDB's edible oil supply to the Gujarat Government will, however, not be at lower than our cost of acquisition," said V Kurien, chairman, NDDB.

The supply will hopefully sober down the edible oil prices that have been on the uptrend, more so after the cyclone hit the Gujarat ports which in turn encouraged hoarding of the commodity in the state.

In an exclusive interview with The Financial Express, Kurien, said: "We have agreed to help theGujarat Government by supplying oil at cheaper rates. For this purpose we had several meetings with chief minister Keshubhai Patel and bureaucrats".

Accordingly, NDDB will sell sufficient quantity of one litre (910 gm) packs of refined mustard oil at "our cost, which will not include the usual margins paid to wholesalers and the marketing agencies." NDDB may however, retain a small margin of around 2.5 per cent.

In order to meet his commitments, Kurien is understood to have already initiated talks with some of the bulk oil millers and suppliers like Indian Vegetable Products (IVP) and others. This is aimed at increasing its undisclosed quantity of mustard and groundnut oil which is intended to be supplied to the government.

Edible oil prices which were around Rs 385 (per 15 kg) in April, had touched Rs 475 by mid-June after the cyclone and torrential rains that has damaged the mustard seeds and oil stored in the godowns of Kandla.

As it is, prices were poised to rise since the overall oilseedproduction this year was lower than the previous year. However, the Kandla factor had added the fuel to the fire resulting in higher prices. Over the past couple of weeks, edible oils seem to have been vanishing from the market, leading to price rise.

Over the next three years we intend to sell over Rs 10,000 crore worth of edible oils," Kurien said. The current market share is said to be around 1.25 lakh tpa valued at Rs 700 crore. "This will be done by eliminating the middlemen and telia rajas in the state which will reduce our overall cost of acquisition." Telia rajas (oilkings-oilseed producers, millers and traders of Gujarat) are known to have a grip on the state's edible oil economy.

Kurien said, it would take seven days to print the statutory level on the tetrapacks and reach the market and was confident of bringing down the prices within 10-15 days. One litre tetrapack of refined mustard oil on Thursday costs Rs 51.

Kurien was opposed to other methods of MIO, like importing palmolein fromMalaysia or other countries to check the rising prices of groundnut oil. "This way, we may end up helping Malaysian farmers and traders. What we should do is to offer better prices to the farmers here to encourage more seed production."

Oil traders and millers in their meeting on Saturday (June 20) with State civil supplies minister Jaspal Singh had agreed to "voluntarily" control the edible oil prices at Rs 440 (per 10 kg) for the wholesale market, and Rs 460 (per 10 kg) for the retail. Singh, however, was not sure that the trading community would strictly follow the price fixed at the meeting. Therefore, Kurien was asked to intervene.

On Tuesday last (June 23) Kurien had a closed-door meeting with Gujarat's Keshubhai Patel and state civil supplies minister Jaspal Singh. Both, Patel and Singh had sought Kurien's help to control the flaring edible oil prices in the state.

According to Kurien, "it is surprising that the government wants to control prices in a liberalised environment. However, it is freeto sell the oil (supplied by NDDB) at subsidised or any rate through the public distribution system (PDS) or any other means. Our job is marketing, theirs distribution."

The price charged by NDDB is likely to be higher than the price fixed at the meeting between Singh and the oilmillers/traders, for, NDDB is not directly under the control of the Gujarat government. "We are not a charitable organisation, for its own reasons, the government may subsidise the oil," Kurien said, adding, " there is no guarantee that the traders and millers will corner this cheap oil and continue to create artificial shortage."

Despite this, in order to control its cost of oil to be supplied by NDDB, chief minister Chimanbhai Patel seems to have requested the Civil Supplies Ministry to intervene. Further, the state government is also understood to have asked NDDB to give details of its cost structure.

When asked if NDDB had enough stocks, Kurien said, "Yes, stocks are sufficient to last this festive season. We've procuredenough oilseeds; have several oilseed crushing centres at Anand, Palanpur, Jagudan (Mehsana) and elsewhere in and around Gujarat; have large silos at Kandla and other places and which have not been damaged in the recent cyclones either." He, however, refused to give details of the quantity at the disposal of NDDB.

As to why selling mustard oil and not the commonly used groundnut oil Kurien said: "All edible oils, if properly refined, should taste bland and appear colourless. After this there is little difference between groundnut and mustard oil."

To another question on why Gujarat alone is concerned more about the edible oil price movement, Kurien replied with an "I don't know.'' On the one hand the government wants to keep price under control while on the other it also wants to levy purchase tax on seeds, sales and turnover tax on edible oils, Kurien said. ``If it is interested in bringing down the edible oil prices, it should remove these levies."

"Groundnut oil is linked to the state's economy andpeople's girth. People here consume a lot of groundnut oil, knowing well that it is not good for their health. "In fact, we print slogans like -- Less Oil, More Health-on every pack sold."

"It was after the success of the White Revolution," recalled Kurien, "NDDB entered the edible oil sector ten years back and emerged a major player in the field. Kurien claimed it was due the then Union Finance Minister HM Patel's request that NDDB had entered the edible oil business, after which the edible oil imports could be brought down from 1.8 million tonnes to 40,000 tonnes in a few years. It went up again, "thanks to Harvard-trained P Chidambaram," Kurien added.