"There are rumours that the government was considering raising the import duty on palm oil and soyabean oil," a dealer at a major vegoil brokerage house said.

No official comment was immediately available.

Such a move would come despite last month's government decision to cut its maximum customs duty on imports to 35 per cent from 45 per cent and reduce the duty categories to four from five - 35 per cent, 25 per cent, 15 per cent and 10 per cent.

"It seems the government wants to place vegoil imports in the highest slot, that is at 35 per cent, from the current 30 per cent," another dealer said.

"The reason is simple, they (government) want to take advantage of lower world prices and boost their import duty revenues," he added.

The dealer said the government was expected to come up with a decision on the duty hike later thisweek.

Dealers said imports and local prices would also remain stagnant on expectations of about 150,000 tonnes of domestic rapeseed oil and canola oil production.

The rapeseed and canola oil will start coming into the market by the middle of April, and the crop this year is expected to be a bumper one, they said.

Meanwhile, the Malaysian palm oil were dull on poor interest today. The rates hovered at around last week's closing levels on Monday morning with players reluctant to trade actively in the absence of strong leads, traders said.

The market is waiting for fresh March crop estimates from private forecaster Ivan Wong due later this week.

"There is basically no interest this morning. Some overseas centres are still shut for the Easter holidays," a trader said.

The benchmark third month June futures contract traded between 1,510 and 1,520 before ending the morning session at 1,510 ringgit, unchanged from Friday.

Elsewhere, in Indonesia, palm olein market was mostly quiet in late trading onMonday following the government's announcement that it would not lower the export tax on crude palm oil (CPO) in April, traders said.

"Basically the market is still quiet and showed no sign of reaction to the government's decision not to lower the CPO taxes this month," said one trader in Medan, North Sumatra.

Earlier on Monday, trade and industry minister Rahardi Ramelan announced that the government would not lower CPO taxes in April because of tight domestic supply.

"Domestic CPO supply is tight. The government has not decided to lower the export tax," he told reporters.

He added that he would lower the tax once he has an idea about supply and demand of CPO as well as its production in Indonesia.

But most traders said they had predicted that the government would not lower CPO taxes soon, because CPO output has not reached its target yet.

"The government has said it before that it would only lower CPO export taxes once production hits seven million tonnes," the trader said. "These days it's bestnot to be taken in by rumours."

Market talks suggested last week that the government would lower the CPO tax to 30 percent in April from the current 40 percent.

Traders said olein prices were quoted around 3,700-3,800 rupiah/ kg in Jakarta and at 3,450 in Medan, North Sumatra.

They also said CPO exports were on the rise, despite a marginal difference in profit making compared to domestic selling.

"Domestic demand has steadily gone down since January, therefore the bulk of olein stocks have been assigned for export sales," said the trader.