10/08/05 HAMBURG (Reuters): Palm oil is likely to increase its share ofthe global edible oil market in 2005/06 while the overall market is likelyto remain in surplus, Hamburg-based newsletter Oil World forecasts.

Global production of the eight main edible oils in October 2005/September2006 is likely to rise to 112.04 million tonnes from 106.87 million tonnesin 2004/05, Oil World forecasts.

This would be above estimated 2005/06 global consumption of 111.60 milliontonnes, up from 105.79 million tonnes in 2004/05.

Of this, 2005/06 palm oil consumption is likely to increase to 34.08million tonnes from 32.05 million tonnes in 2004/05.

This would put palm usage only slightly behind estimated 2005/06 soyaoilconsumption of 34.32 million tonnes, up from 32.40 million tonnespreviously.

But it warned palm oil prices would have to remain competitive to achieveincreased sales.

"Palm oil demand has shown high price sensitiveness in several keymarkets," it said. "The expansion of the palm oil share in the last sixseasons was favoured by gradually rising price discounts, particularlyagainst the major competitor soyabean oil." "However, as soon as the pricecompetitiveness of palm oil had fallen much below average, its marketshare declined or only stagnated."