Import of palm oil generally declines from October every year. However, market sources say this year the trend has been reversed, mainly due to the operations of a importer-trader syndicate, that has been trying to maintain a scarcity like situation.

The records at the Calcutta port's Budge Budge terminal, the only one in eastern India for handling edible oils, show that during the first half of the 1998-99, imports of palm oil stood at 2,11,000 tonnes as against 1,57,000 tonnes during the corresponding period of 1997-98.

The rising tendency of import, which was mainly due to the acute shortage of edible oils in the country will continue until the new mustard crop comes up in February 1999, said Satish Kumar Goyal, director of Shrihari Agro-industriesLimited.

Generally the imports decline after October as the new crop of soya and groundnut begin to arrive in the market. The second half of a financial year has always registered a lower volume of import than the first half.

During the second half of 1997-98, import was reduced to 64,000 tonnes as against 1,57,000 tonnes during the first six months. But in the current year, the trend indicates that there imports are not declining.

Up to the third week October, more than 14,000 tonnes of palm oil have landed at the Budge Budge terminal.

According to market circles, palm oil imported through Budge Budge is being transported to all over the eastern, central and northern India. Goyal said though soya oil is expected to arrive at market in end-October, it will hardly meet small portion of the growing demand for edible oils. This apart, the government has allowed an open import of oilseeds after long lobbying by the oil industry with the centre.

But it will be of no help to increase the supply of oils inthe market as the syndicate formed by the millers and importers have kept the supply of the oilseed in such a measured level that a scarcity-like situation in edible oil will continue to persist throughout the season.

Thus a bullish trend in the price of edible oils may sustain over the year.It may be noted that, apart from the consumption in domestic households, a large quantity of palm oil is being procured by the oil millers and traders themselves who mix the oil with mustard oil to a certain amount as both the oils are identical in colour.

The mustard oil is at present selling at all time record price between Rs 70 and Rs 75 per kg in retail markets, whereas palmolein is ruling between Rs 45 and Rs 47 per kg.

However, according to an oil miller, in Calcutta, the mixing of palmolein with mustard oil only is possible during non-winter seasons as palmolein freezes in winter.

With the onset of winter, the mixing of palm oil with other oils will have to stop and a large amount will have to be sold inthe open market. This might lead to a decrease in palm oil imports in winter.