25/09/04 BOMBAY (Reuters) - Global vegetable oil supply is likely toimprove in the last quarter of the current year with the beginning ofharvests in some countries, putting pressure on world prices, a leadingindustry official said on Saturday.

Fresh demand for edible oils is expected to be slow duringOctober-December because of sufficient stocks in consuming nationsfollowing heavy shipments in the past two months, London-based DorabMistry, director of Godrej International Ltd, told Reuters in aninterview.

"Prices should come under pressure as the post-October demand is going tobe slow, but the supply is likely to be good," Mistry said on thesidelines of an industry seminar in Bombay.

Soybean harvests in the United States, beginning next month, are expectedto be much better this time while Indian oilseed crops, except groundnut,were looking good, he said.

Mistry said the U.S. soybean output was seen rising to 77-78 milliontonnes this year from 65 million tonnes in the previous year. Indiantraders estimated the country's oilseeds output from the winter crop, sownin June and July, at 12.6 million tonnes compared with 13.9 million a yearearlier.

The soybean crop in South America, where planting may be a little delayedbecause of a lack of rains in some parts, was also forecast to be betterthan the previous year, he said.

"It's rare that rains fail in a big way in South America," Mistry said,adding soybean output in South America is forecast to rise to about 100million tonnes from 85 million tonnes in the previous year. The crop willbe harvested from January.

Mistry said price sentiment was also bearish because of an expected risein palm oil production in Malaysia and Indonesia, the world's top twoproducers.

But production forecasts might change if there is any disturbance in theclimatic condition in Malaysia and Indonesia because of possible El Ninoweather patterns, he said.

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Mistry said Chinese importers bought huge volumes of soyoil forAugust-September shipments as the country, the world's second-largestedible oil importer, would have new quality norms for oil imports fromOctober 1.

"From the next month, their customs will not clear soybean oil which has ahexane content of more than 3 parts per million. But people say thecriteria are impossible to meet," Mistry said, adding it was a non-tariffbarrier to control oil imports.

He said China bought about 1 million tonnes of soyoil in the past threemonths. "The pipeline is filled all over the world," Mistry said.

India, the world's top edible oil importer, had contracted to import about800,000 tonnes of soyoil for October shipments, he said.

"Such high imports are normally unheard of during the harvesting period inIndia," Mistry said, adding that poor rains in June and July had promptedpeople to rush for import bookings, but the outlook had later improvedfollowing revival of monsoon rains.

He said oil shipments in Muslim countries were at a peak in August andSeptember before the fasting month of Ramadan due to start in mid-October,as many Muslims cook traditional oil foods.