MUMBAI (Dow Jones)--Indian edible oil prices during the week ended Friday
ended tad lower due to a lull in demand in local markets.

  However, traders expect prices to resume their rise in the coming weeks on
firm overseas trend and supply tightness in local markets.

  Low availability of soybean and rapeseed has affected supply of soft oils in
the market and this squeeze is likely to continue until the new soybean crop
arrives, said Ramesh Malpani, a trader in the major soybean producing province
of Madhya Pradesh.

  Farm Ministry data released Friday show area under oilseed cultivation during
June 1-27 was up at 1.92 million hectares compared with 1.84 million hectares a
year earlier.

  Sowing of soybean was carried out in 811,000 hectares down from 996,000
hectares a year earlier.

  "In Madhya Pradesh, soybean sowing has been lagging due to inadequate
rainfall. Only around 30%-40% has been sown as of now," said Malpani.

  This would delay the new crop arrival by two-three weeks, he said, extending
the supply deficit in the country.

  However, area under groundnut cultivation was 904,000 hectares, up from
506,000 hectares, the government data showed.

  Although the government has announced the sale of edible oils at a subsidized
rates from July, the trader said that the additional supply is unlikely to
depress prices as the quantity is not enough to meet local demand.

  The government plans to distribute 1 million metric tons of imported edible
oils at a subsidy of 15 rupees ($0.35) a kilogram to lower income households.

  The four state-run trading houses, namely PEC Ltd., MMTC Ltd., State Trading
Corp., and National Agricultural Cooperative Marketing Federation, have
contracted to import 179,000 tons of edible oils till now, the government said.

  Floods in U.S. Midwest and a firm trend in Malaysian palm oil prices will
also keep local prices on the upswing in the coming days, traders said.

  In India, price of local edible oils is directly impacted by international
markets as the country imports nearly half of its annual edible oil demand.

  It buys soyoil from Argentina and Brazil and palm oil from Malaysia and
Indonesia.

  Local refined soyoil was at INR67,000/ton Friday, down from INR67,300/ton a
week earlier.

  Refined, bleached and deodorized palm olein was at INR57,600/ton, down from
INR58,400/ton.

  Crude palm oil was trading at INR51,300/ton, down from INR51,500/ton a week
earlier.