Online investment advisor Surf88.com writes on prospects in the palm oilindustry.NOT AS BAD. Overall, the June palm oil statistics turned out better thanexpected. While crude palm oil (CPO) production increased 2% as expectedfrom May, exports did not decline as much as feared, falling 7.2% versusexpectations for a 9% drop.Palm oil stocks continued to fall for the fourth consecutive month, downby another 2% to just above 910,000 tonnes.For the first half of 2002, CPO production fell 6% from the same periodlast year while exports were about 5% lower. Palm oil stocks at end-Junewere 25% below end-2001 levels, and the lowest in four years.Reasons to be still positive. The recent weakness in CPO prices was indeedtemporary, and prices have since climbed back to around RM1,380 per tonne.We believe there is room for further upside even though the crop isentering its peak production season.Meteorologists now believe that the chance of El Nino happening at the endof this year is as high as 90%. If so, this will affect palm oilproduction next year, after an estimated 10% decline in 2002.Latest estimates for major global edible oils already point to anotheryear of tight supply, reducing stocks to its lowest levels in four years.We are hence still positive on plantation stocks and would retain ouroverweight call. Our top picks are KLK (RM6.50), PPB Oil (RM3.12), IOICorp (RM6.30) and IOI Corp-WA (RM2.77).l For more reports, click on www.surf88.com

(The informations and opinions expressed in this article represent theviews of the author only. They should not be seen as necessarilyreflecting the views of Palm News)