KUALA LUMPUR, March 7 - Partial data available indicate CPO production inFebruary was in line with our projection of December 14. As a matter offact, combined actual output in December-January at 1.88 million tonnesalso came close to our estimate/projection of 1.865 million tonnes(1.86-1.87 million tonnes).We peg production in February at 775,000 tonnes. This is 160,000tonnes or 17 percent lower than a month earlier. Year-on-year, productionfell 113,400 tonnes or 12.8 percent. This brought the contraction in thelatest three months December-February to 8.2 percent or 235,000 tonnes.Our December 14 estimate/projection on offtake in December-January attwo million tonnes also came close to actual offtake of nearly 2.03million tonnes. The 30,000 tonnes more in actual offtake reflected verymuch larger than projected imports of palm oil. This was also the case inFebruary when imports remained large at an estimated 42,000 tonnes or wellabove our previous tentative estimate of 17,000 tonnes but offtake thistime fell severely.While total palm oil supply turned out to be somewhat higher inFebruary, total offtake was a big dissappointment. Exports at an estimated670,000 tonnes can be described as dismal as they were down substantiallyfrom 827,500 tonnes a month earlier and 821,700 tonnes a year ago. Themonth-on-month drop in exports of around 158,000 tonnes was due chiefly tolarge declines in liftings by the European Union (EU) and Pakistan.Shipments to the European Union (EU) fell by around 50,000 tonnes toan estimated 75,000 tonnes while Pakistan cut its offtake by an estimated60,000 tonnes to 75,000 tonnes. Shipments to the United States (US) alsofell sharply by 20,000 tonnes. The only spark in the gloom was China whichraised its offtake to an estimated 130,000 tonnes from 72,000 tonnes inJanuary and 63,200 tonnes a year ago.Shipments to India at around 105,000 tonnes dropped slightly by some5,000 tonnes compared to January but fell a hefty 100,000 tonnes fromFebruary last year. This brought the contraction in shipments to India inJanuary-February to a hefty 170,000 tonnes or 44 percent to an estimated216,000 tonnes from 386,000 tonnes a year ago.The continued contraction in imports of edible oils by India sinceSeptember last year followed a significant recovery in the winter (kharif)oilseed harvest of 1.4 million tonnes to 12.3 million tonnes last Octoberand expectations for an increase of up to 900,000 tonnes in the simmer(Rabi) oilseed crop to be harvested in about a month's time. No changeswere made in India's import tariff structure for vegoils or oilseeds inthe recent Budget.The month-on-month decline in palm oil production in February was moreor less matched by a similar drop in exports. However, with importscontinuing at a high level, stocks of palm oil at end-February thus showan increase of around 20,000 tonnes to 1.27 million tonnes. U.S. stocks ofSBO also remained at high levels and even rose to upset forecasts latelast year they would decline.Stocks at end January reached all time record high level of 3,045million lbs (1.3 million tonnes), up from 2,868 million lbs in thepreceding month and 2,380 million lbs a year earlier.Argentina's announcement yesterday of a levy or tariff of 10 percenton exports of grain and oilseeds and five percent on meal and vegoils cameas a little surprise. The cash-strapped government needs to have a shareof the windfall profits on agricultural exports boosted by the more than50 percent gains arising from the development of the peso against thedollar. Argentina has been a keen seller in the export market in recentweeks. China meanwhile missed the deadline yesterday to issue certificatesof entitlement for TRQs.(The opinions expressed in this article represent the views of theauthor only. They should not be seen as necessarily reflecting the viewsof Reuters)