Economics says low supply means higher prices. Experience says the `telia rajas' of Gujarat are master manipulators of the market. Last year, when the State had a bumper groundnut crop of 18 lakh tonnes, they jacked up the prices to a mindboggling Rs 1,100 for a 15-kg tin around Diwali.

Thanks to a bad monsoon, the State lost a whopping 60 per cent crop this year which, at harvest, is expected to be seven to eight lakh tonnes. Leading traders requesting anonymity say prices will touch an unprecedented Rs 1,200 and Rs 1,500 for a 15-kg tin this time.

Civil Supplies Minister Ashok Bhatt, who claims the prices will be at an all-time low, says the Government decision to lift the stock limit of 60 tonnes will help traders get supplies from the three groundnut producing states in the South, which have registered a bumper crop of nearly 20 lakh tonnes. Already, over 6,000 tonnes of oil has already reached South Gujarat from Andhra Pradesh, Karnataka and Tamil Nadu, he says.

But economist and edible oil expert Harjivan Suthar says Bhatt's strategy is no cure. The prices are low now because this is not the peak demand period. ``You will see them scaling once the festivals begin less than a month from now,'' Suthar says. According to Suthar, even prices in the South will increase the moment demand picks up in Gujarat and transportation cost will add to this.

A leading oil miller of Ahmedabad agrees with Suthar. With the State Government lifting the stock limit, there will be hoarding, as has often happened in the past, he says. ``The stock will come out during the festivals and will be available at a premium,'' he says. Yet another miller points out that by Diwali the election process would have been over and, therefore, there will be little interference from the government.

However, president of the powerful Saurashtra Oil Millers Association (SOMA) Ukabhai Patel insists that groundnut oil prices will remain low because more and more people are turning to other edible oils. ``Just about 30-40 per cent people now need groundnut oil in the State, the rest eat anything from palmolein, cottonseed, soyabean to rapeseed oil; palmolein is available as cheap as Rs 22 per kg.''

The switchover began in 1985 when a severe drought forced the State to source its oil requirements from other States. ``After that it was strengthened by the price rigging of groundnut oil,'' admitted a leading groundnut oil miller, who wished to remain anonymous. Last year, the State imported 12 lakh tonnes of palmolein, while this year the figure is expected to touch 20 lakh tonnes, says Ukabhai of SOMA.

Suthar, however, asserts it is the nexus between politicians and oil millers which is forcing Gujaratis to take to other oils. ``People here are obsessed with groundnut oil, and if they are changing this preference it is not by choice but because they can no longer accept prices fluctuating at the miller's sweet will,'' he says.