21/08/2007, NEW DELHI (Reuters) - Edible oil prices in India should not rise sharply in the festival season that starts this month because of imports, timely monsoon rains and prospects of a good oilseed crop, industry officials said on Monday.

Demand for oils rise in the festival season, which peaks with the festival of Diwali in November, and that normally pushes up prices of domestic and imported oils.

Consumption of edible oils rises by about 50,000 tonnes per month between August and November from usual levels of about 900,000 tonnes, traders said. Imports are about 450,000 tonnes a month.

"Domestically I do not see the vegetable oil prices hitting the roof with strong stocks in the system, timely and well spread out monsoon rains, and good imports," said Atul Chaturvedi, president of Adani Industries, a top edible oils trading firm.

Rainfall in Pune in June and July, crucial for summer-sown crops, was 471 millimetres, 3.4 percent above normal, according to the weather office.

Chaturvedi said palm oils prices were already high and further sharp rises were unlikely because of expected increases in output in Malaysia and Indonesia.

India, the world's leading edible oil buyer, imports nearly half of its annual needs of 11 million tonnes, buying palm oils from Malaysia and Indonesia and soy oils from Brazil and Argentina.

Traders said international prices of palm and soy oils had gone up by 35 to 40 percent over the last one year.

Rises in domestic prices have been less due partly due to cuts in customs duties, including some last month, as the government tries to keep food prices and inflation in check.

Traders said soy oil in the domestic market was quoted at 4,700 rupees per tonne, up from 4,000 rupees last August, while palmolein prices were at 4,500 rupees per tonne against 4,250 rupees a year ago.

"Festival demand might push up prices by about 100 rupees a tonne because supplies are comfortable and the next crop will be good," said Govindbhai Patel, an edible oils trader in Gujarat.

The main edible oils used by India's 1.1 billion people are palm, soy, mustard and groundnut oils.

The Farm Ministry said that as of August 17, oilseeds had been planted over 16.47 million hectares, up from 15.23 million hectares a year ago. The area under soybean has gone up 8 percent while the groundnut crop has increased by 15 percent.