NEW DELHI, June 14 (Bernama) -- Indian farmers may not go in forlarge-scale sowing of groundnut or soyabean this year if prices of edibleoils continue to decline in the international market, according to areport in the financial daily, Hindu Business Line.

The farmers, who are in the process of planting for the Kharif (summer)season, may instead opt for castor, cotton, pulses, coarse grains or evensugarcane, the report said.

But, says the report, worse could follow if the fall in domestic edibleoil prices, currently not as pronounced as global decline, takes place atharvest time, when the farmers bring their crop to the market.

Global prices have plummeted US$150 per tonne (US$1 = RM3.8) in crudesoyabean oil and US$120-130 per tonne for palm group of oils in the lastthree months.

Domestic prices, too, have fallen, though not as much, one reason forwhich is said to be non-revision in tariff value, or base value, for palmoils.

(Tariff value is the value at which duty is imposed on the import ofedible oils).

The reports says that Malaysian palm oil stocks, too, are expected to hita three-year high by end-June.

On June 1, the Indian government cut the base import price, or tariffvalue, of crude soyabean oil to US$628 per tonne from US$702 per tonne.

It did not touch the tariff value of palm group of oils.

The government is reluctant to bring down the tariff value in line withglobal prices, fearing that it could lead to a crash in domestic priceduring the crucial sowing season, the report says.

On the other hand, players believe that a tariff value cut is around thecorner and for this reason -- and also in anticipation of a furtherdecline in international prices --, it is not undertaking any imports, thereport adds.

India imported just 190,000 tonnes of edible oil in April and 250,000tonnes in May this year, compared to 510,000 and 700,000, respectively inApril and May 2003.

Prices are likely to go down further as global oilseeds production during2004-05 (October-September), is projected at a record 378 million tonnes,an increase of 42 million tonnes, according to US State Department ofAgriculture (USDA).

-- BERNAMA