Adi Godrej, chairman of India's Godrej Foods Ltd, said an expected surge in oilseed crops in the United States and Argentina is expected to more than offset an anticipated shortfall in the Malaysian palm oil crop because of floods.

"The Malaysian crop is expected to fall, but the United States and Argentina crops will make up for the shortfall," Godrej said in a telephone interview.

Plantation sources in Kuala Lumpur said Malaysia's palm oil output was expected to fall sharply this month due to floods triggered by northeast monsoon rains that started in mid-November and would continue until March.

Godrej said global price movements in the past month had pulled down Indian domestic edible oil prices and the international trend would continue to impact the domesticmarket in the coming months.

"Both international and domestic prices have come down because of good supplies," Godrej said. "Edible oil prices will not go up. They will remain stable."

India imported 2.08 million tonnes of edible oil in 1997/98 (November- October) compared with 1.75 million tonnes in the previous crop season.

The country imported about 600,000 tonnes of edible oils in the first two months of the 1998/99 crop season compared with 175,000 tonnes in the same period of 1997.

Godrej said domestic edible oil demand was growing at a rate of about five percent annually and there was a shift in demand in favour of branded and packaged oils because of growing health concerns.

"The mustard oil scandal has affected the sentiment," Godrej said." After the mustard scandal, there is growing preference for branded and packaged forms of oils. Demand for branded and packaged oils is growing at a rate of 25 percent."

More than 50 people died and hundreds were treated in hospitals in India duringAugust and September because of dropsy disease caused by the consumption of adulterated mustard oil.

"There is also a growing demand for sunflower oil over other oils because it is healthy and of low cost," Godrej said.

Trade officials said sunflower oil was quoted at about Rs 32,500 per tonnes compared with about Rs 33,300 a week earlier.

Groundnut oil was quoted at Rs 41,500 ($976) a tonne as against Rs 43,500 a week ago. Palm olein was traded at Rs 34,500 a tonne, largely unchanged from last week levels, they said.

"Imports are expected to be about two million tonnes this season," Godrej said. "Domestic crop arrivals along with imports will help prices remain stable."

Agriculture minister Som Pal said last week that the summer oilseeds crop was progressing in a very healthy manner. India harvested an oilseeds crop of 13.05 million tonnes in the winter season.