24/9/06 MUMBAI (Reuters) - Malaysia's palm oil exports to India are likely to fall to 500,000 tonnes in 2006 from 650,000 tonnes a year ago, despite am import duty cut, a top Malaysian trade official said Sunday.

"India should reduce import duties further if it wanted more Malaysian palm oil to flow into the country," said Yusouf Basiron, chief executive of the Malaysian Palm Council.

The government reduced import duties on crude palm oil and palmolein in August to 70 percent from 80 percent, while duties on RBD palm oil and palmolein were cut to 80 percent from 90 percent.

India consumes about 11 million tonnes of edible oil a year and palm oil constitutes 40 percent of the country's total edible oil imports of more than 4 million tonnes.

Malaysia has been telling India that custom duties on palm and soy oils should be at levels at which the two could compete.

Soyoil currently carries a 45 percent duty because of a WTO regulation. India imports palm oil from Malaysia and Indonesia and soyoil from Argentina and Brazil.

He said Malaysia's palm oil output would rise slightly to 16 million tonnes in 2006 from 15.8 million in 2005 and exports would be in the region of 12 to 13 million tonnes this year.

Malaysia's biofuel production in 2006 would rise to 500,000 tonnes in 2007 from an estimated 100,000 tonnes in 2006, he said.