The adulteration stalled trading in mustard seeds and its oil since last week, leading to jump in palmolein prices, both in the domestic and the international markets.

The second aspect (permitting oilseed imports) drove down groundnut oil prices to Rs 550-565 per 10 kg from a high of Rs 605 on August 27.

The announcement of oilseed imports prompted captains of the harassed oilseeds extraction industry to say "its a welcome move," but the announcement alone doesn't seem to have led them anywhere, for, want of details on such imports that have to be spelt out by a government notification. Industry sources say, the detailed notification will be issued sometime this week.

According to them, the mustard oil controversy, and the subsequentcountry-wide ban by the government, is likely to result in an artificial shortage of around 10 lakh tonnes of edible oils in the current festive season. This is the estimated size of mustard oil currently lying unsold at the godowns of wholesale merchants and oil millers.

Its certain that India will be forced to import more edible oil, mainly palmolein, to meet the edible oil shortage and palmolein exporters have already hiked their prices in view of the demand. On Friday last, the spot prices for Malaysia palmolein jumped a high of $374-376 per tonne from around $363 in mid-August. The September delivery prices too rose to over $375 per tonne from the under-$360 per tonne in mid-August.

Merchants from the oilseeds and edible oil industry fear, if the related issues are not settled, the country would end up losing valuable foreign exchange on additional imports of at least 5-7 lakh tonnes of edible oils during 1998-99 to meet the rising demand.

Such imports will indirectly help the palmolein exportingcountries, they say.

On an average, India imports around 1.5 million tonnes of edible oils. During the five month period to August 1998, some 13 lakh tonnes of edible oils have been imported. Given the current situation, the rising demand and high edible oil prices, mainly groundnut and sunflower oil, "we might see imports of around 5-7 lakh tonnes more till March 1999," said an industry source.

Interestingly, the mere announcement of oilseeds import has punched the bloated sentiments of edible oil traders. Fearing that the supply of edible oils may improve after oilseeds are imported, traders began offloading their stocks of both groundnuts and oils.

Hardly anyone in the industry is convinced about oilseeds imports becoming a viable proposition in the near future, for, the government wants the oilseeds to be imported in split form. This sources maintain, will be uneconomical, to say the least.

The mustard oil controversy has halted trading in mustard oil at major edible oils trading centres. But thishas helped prices firm up in other edible oils. Just before the mustard oil controversy, and the subsequent country-wide ban on mustard oil by the government, mustard oil at Jaipur was quoted at 465 per 10 kg, up from around 425 earlier, rapeseed refined oil (Jaipur), on the other hand has jumped to a high of Rs 410-425 per 10 kg from around Rs 400 per 10 kg in mid-August. Prices for rapeseed refined oil have firmed up once again and crossed the Rs 400-mark to touch a high of Rs 415 per 10 kg on Friday (September 4).

Oilmillers and solvent extraction industry are both worried about the developments in the mustard oil sector and its impact on the edible oils sector as a whole.

Says one top industry source: "Adulteration of mustard oil that led to deaths of a few persons may have occurred in small pockets of New Delhi. But making it a nation-wide issue could have been a calculated conspiracy or the handiwork of international players of edible oils".

Elaborating on the point, the source said: "Palmoleinexporting countries, facing acute financial crisis, might have been prompted to rake up the issue for, they are interested in increasing their exports and earn maximum possible foreign exchange. If this is not so, how come there are no reports of deaths from other regions in northern and eastern parts of the country, where mustard oil is consumed largely."

Said Govindbhai Patel, chairman, Central Organisation of Oilseeds & Oils Industry and Trade (COOIT): "Barring a few culprits, millers do not engage themselves in adultrating mustard oil with argemen seeds that grow alongside the mustardseed crop. Argemen is not hazardous as is made out to be, if it was so it's impact should have been known from other centres as well. Therefore, cases of dropsy disease could have been because of reasons other than argemen adulteration."

Such imports will indirectly help the palmolein exporting countries, they say.

On an average, India imports around 1.5 million tonnes of edible oils.

During the five month period toAugust 1998, some 13 lakh tonnes of edible oils have been imported. Given the current situation, the rising demand and high edible oil prices, mainly groundnut and sunflower oil, "we might see imports of around 5-7 lakh tonnes more till March 1999," said an industry source.

Interestingly, the mere announcement of oilseeds import has punched the bloated sentiments of edible oil traders. Fearing that the supply of edible oils may improve after oilseeds are imported, traders began offloading their stocks of both groundnuts and oils.

Hardly anyone in the industry is convinced about oilseeds imports becoming a viable proposition in the near future, for, the government wants the oilseeds to be imported in split form. This sources maintain, will be uneconomical, to say the least. The mustard oil controversy has halted trading in mustard oil at major edible oils trading centres. But this has helped prices firm up in other edible oils.

Just before the mustard oil controversy, and the subsequent country-wide banon mustard oil by the government, mustard oil at Jaipur was quoted at 465 per 10 kg, up from around 425 earlier, rapeseed refined oil (Jaipur), on the other hand has jumped to a high of Rs 410-425 per 10 kg from around Rs 400 per 10 kg in mid-August. Further, prices for rapeseed refined oil have firmed up once again and crossed the Rs 400-mark to touch a high of Rs 415 per 10 kg on Friday (September 4).

Oilmillers and solvent extraction industry are both worried about the developments in the mustard oil sector and its impact on the edible oils sector as a whole.

Says one top industry source: "Adulteration of mustard oil that led to deaths of a few persons may have occurred in small pockets of New Delhi. But making it a nation-wide issue could have been a calculated conspiracy or the handiwork of international players of edible oils". Elaborating on the point, the source said that palmolein exporting countries, facing acute financial crisis, might have been prompted to rake up the issue for, they areinterested in increasing their exports and earn maximum possible foreign exchange. If this is not so, how come there are no reports of deaths from other regions in northern and eastern parts of the country, where mustard oil is consumed largely.

Said Govindbhai Patel, chairman, Central Organisation of Oilseeds & Oils Industry and Trade (COOIT): ``Barring a few culprits, millers do not engage themselves in adulterating mustard oil with argemon seeds that grow alongside the mustardseed crop. Argemon is not hazardous as is made out to be, if it was so it's impact should have been known from other centres as well. Therefore, cases of dropsy disease could have been because of reasons other than argemon adulteration."