HAMBURG (May 21 2003) : Malaysian palm oil stocks may fall again in Mayas net exports and domestic use are likely to exceed the country'sproduction, Hamburg-based newsletter Oil World said.

The pickup in Malaysian palm oil exports shaping up for May to India,China, Europe and other destinations plus domestic use is likely to raisetotal demand for Malaysian palm oil above production and contribute to atleast some further decline in total Malaysian palm oil stocks during May,"it said.

"It will now be very important to watch whether, contrary to the seasonalincrease, palm oil production stagnates or declines in May."

Oil World estimates Malaysia will export over 1 million tonnes of palm oilin May against 970,000 tonnes in April.

"The overdue price correction has started," it said.

It added: "On the world market palm oil is still undervalued relative tosoyabean oil. For the coming weeks we expect the discount of palm oilversus soyaoil to narrow".-Reuters