HAMBURG, April 2 (Reuters) - Lack of rain in Malaysia is reducing thecountry's palm oil production, Hamburg-based newsletter Oil World said.It sees the country's palm oil output in calendar year 2002 at 11.5million tonnes, down 300,000 tonnes on the year."At the moment we expect a considerable downturn in Malaysian palm oilstocks to 980,000 tonnes as of end-September 2002 against 1.22 milliontonnes one (year ago) and 1.37 million tonnes two years earlier," thenewsletter said.Lack of rain in leading Malaysian production areas will have an impacton yields and production during both 2002 and 2003, it said.The extent is still unknown and will depend on whether the rain neededcomes soon or whether dryness continues, it stressed.In March, Oil World estimated that combined global stocks of the 17main edible oils and fats will at end-September 2002 fall by 1.3 milliontonnes on the year."We therefore expect oil prices to appreciate during the remainder ofthis season, probably under the lead of palm oil," it said.