Oilseeds and soyoil futures fell more than 2 percent on Friday following a sharp fall in overseas markets and on rising soybean supplies from new-season crop in the local market.
Malaysian palm oil futures were down 3.88 percent at 2,425 ringgit per tonne at 0845 GMT, while U.S. soybeans fell 0.94 percent at $15.34 per bushel.
"The fall in Malaysian palm oil is scaring Indian buyers. They thought prices have stabilized, but again the way prices are falling, edible oil buyers are deferring purchases," said a Mumbai-based dealer, who declined to be named.
Palm oil buyers in India are asking for discounts on agreed deals and putting off purchases, hoping a slide in global prices will continue and bring cheaper product as a big demand season approaches.
The November soyoil contract on India's National Commodity and Derivatives Exchange was down 2.1 percent at 637.1 rupees per 10 kg, after falling to 631.6 rupees earlier.
India is the world's biggest edible oils importer, buying more than half its needs of around 17 million tonnes a year from overseas. It uses mostly palm oil in unrefined form from Malaysia and Indonesia, the world's top producers.
The November soybean contract fell 2.49 percent to 3,158 rupees per 100 kg, while rapeseed dropped 1.46 percent to 4,046 rupees per 100 kg.
The top rapeseed producing north-western Rajasthan state received good rainfall in September, raising soil moisture required for rapeseed sowing, dealers said.
At the Indore spot market in Madhya Pradesh, soyoil edged up 4.05 rupees to 676.05 rupees per 10 kg, while soybeans rose 6 rupees to 3,235 rupees per 100 kg. At Sri Ganganagar in Rajasthan, rapeseed dropped 100 rupees to 4,100 rupees.
Indians will celebrate Dussehra this month and Diwali in November. Demand for edible oils usually rises during these festivals.
India's soybean production in 2012/13 is likely to rise 8.8 percent on year to 12.67 million tonnes, while its rapeseed output in the current year is likely to climb nearly 25 percent to 6.5 million tonnes, industry officials said.
