KUALA LUMPUR (July 03 2003) : Palm oil freight rates to key consumers inAsia are likely to hold steady this month due to firm demand, especiallyfrom the world's largest edible oil consumer India, brokers said onWednesday.

Freight rates to the west coast of India, where most of India's palm oilcargoes discharge, were steady at $25-$26 a tonne.

Rates to India's east coast from main palm oil producers Malaysia andIndonesia were quoted at $20-$21 a tonne.

"It's tough to find vessels lately. India is a hot buyer," said one KualaLumpur broker. Brokers said India had so far booked up to 300,000 tonnesof palm oil for July shipments.

India also purchases soyaoil from Brazil and Argentina, and brokers saidfreight rates to the big importer from South America were steady at$35-$37 a tonne.

"There are a lot of deals done secretly with Indonesia," said one broker,referring to the world's second largest palm oil producer.

"But the monsoon is coming, and if India's July imports are still good,then it would have to slow down in August and September," he said.

India normally imports 400,000 tonnes of palm oil monthly but traders saidthe country bought more than 500,000 tonnes oil each month from March toJune because local importers believed there would be more delays in thearrival of monsoon rains.

"There had been a lot of speculative buying by India. I think the Indianimporters had made wrong interpretations about the monsoon, which isactually good for us," said the first broker.

"Now the Indians have to collect the cargoes," he added. Despite a delayof a few days, this year's monsoon has been progressing well in India andhas covered about 80 percent of the country.

Indian agriculture depends heavily on the monsoon because only about athird of the country is irrigated.

"India has to slow down," said the second broker. "You know the Indianstyle of doing things. They all like to jump on the bandwagon at one time,but they also like to pull out of the market all of a sudden," he said.

Brokers said freight rates to India could soften in August and September,but rates to Pakistan and the Middle East were likely to be firm becauseof prospects of more demand ahead of the Ramazan in October.-Reuters