``There appears to be no fundamental reason for the sudden spurt in edible oil prices. The government would expect trade to ensure prices remain within reasonable limits,'' an official press release said here today.

Expressing concern over the rising prices of edible oil in the last four months despite peak arrivals of rabi oilseeds, it said the government will not hesitate to reimpose the storage (control) order to check spiralling prices.

The release said the supply-demand situation for the 1997-98 oil season has been reviewed and current assessments of the next harvest indicate that the deficit for the year will not be more than the previous season.

This shortage can be met through imports, which have now been allowed under open general licence (OGL) at a 25 per cent duty, it said. Referring to recent statements of tradeassociations in the oil sector, it said reports of impending shortage were unfounded. The statement said the government was conscious of rising palmolein prices in the global market following an export ban slapped by Indonesia and the hardening of the US dollar.

However, the situation is expected to ease with Indonesia planning to lift the ban this month-end, it said. Moreover, with the rabi oilseed crushing season at its peak, there should be ample availability of edible oil in the next three months, it said.

Statutory control on stock holdings had been removed in November last in view of a drop in oil prices after persistent demands by the industry.

Oil traders had then assured the government that there would be no abnormal prices either due to hoarding or other speculative strategies, the release added.