HAMBURG (April 30 2003) : Global palm oil demand is still running aboveproduction despite recent production gains, Hamburg-based newsletter OilWorld said.

Larger-than-expected Malaysian palm oil production in March raised worldJanuary/March output to 5.46 million tonnes, up 4.2 percent on the year.

"Despite the higher production in January/March, world palm oil demandstill exceeded production by 900,000 tonnes, enforcing a reduction ofworld palm oil stocks to a four-year low of 3.1 million tonnes as ofend-March," it said.

Production will show a seasonal increase in coming months but still remainbelow demand in April and June when a further slight fall in world stocksis expected, it added.

But palm oil stocks are likely to recover in July/September, it said.

It has raised its forecast of Malaysian crude palm oil output to 12.4million tonnes in the calendar year 2003, up 500,000 tonnes from2002.-Reuters