6/8/04, Oilworld - The return of monsoon rains in India has improvedoilseed crop prospects but the damage from drought in July cannot be madeup. The country can expect only a mediocre oilseed crop in 2004,significantly below last year’s record. The result will be a notable risein import requirements next season.

Apart from that, import demand in Aug/Sept will be on the rise owing toseasonally low production, festival demand and unusually low stocks. Thesefactors led to rising domestic vegetable oil prices in July, which wereabove a year ago for soybean oil and palm oil. The Indian Government isexpected to reduce the base price for imported oils soon to adjust it tolower world market quotations. The government may be inclined to reducethe tariff burden also in view of recent alarming inflation rates, whichreached 6.5-7.5% in July.