Jul 18, 2002 (OIL WORLD FLASH) - Due to the unusually low growth of exportsupplies we forecast world imports of palm oil to rise only 0.32 Mn T or1.8% to 18.30 Mn T in Oct/Sept 2002/03. This compares with an increase byan estimated 0.61 Mn T this season and an average 1.36 Mn T annuallyduring the five seasons ended 2000/01. The increase next season will beonly moderately larger than the growth of 0.2 Mn T registered in the tightseason 97/98 when the price of crude palm oil cif Rotterdam averaged $640. The market’s rationing job in 2002/03 will not be easy either. Alsoin 1997/98 some countries increased their imports more sharply, viz. Indiaby 290 Thd T, Malaysia by 215 Thd T, Pakistan by 190 Thd T and the EU by105 Thd T. As the combined total of these countries alone far exceeded theincrease in world imports, other countries had to reduce imports more orless sharply. The bulk of the reduction occurred in developing countriesand the largest decline was registered in Chinese imports, viz. by 361 ThdT. Next season we expect the strongest import demand to again come fromIndia where the poor monsoon will affect domestic production while carryinstocks of oils next Oct 1 are estimated to be down 0.28 Mn T on the year.We therefore expect Indian palm oil imports to reach 3.8 Mn T next season,only second to the record level of 3.85 Mn T in 2000/01 and up 0.53 Mn Tfrom this season. Furthermore we expect the imports of China to increaseby 160 Thd T and those of the EU by 50 Thd T. This means that the importsof the rest of the world will have to be reduced by 420 Thd T next season.This will probably not be possible without prices for crude palm oil cifRotterdam rising above $ 500 and establishing at least a small premiumabove Dutch crude soybean oil fob exmill. Thd T in April/June, with thebulk of it shipped in June. This compares to only 44 Thd T in April/June2001. A further pick-up in exports is reportedly occurring this month.Argentina is seen exporting at least 100 Thd T of soybean oil to China inJuly and some smaller quantities are being shipped from Brazil.

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