KUALA LUMPUR, April 4 (Bernama) -- A major change is shaping up for palmoil as the growth in the commodity's production is slowing downconsiderably and global stocks seem likely to decline sharply.

"We currently expect a downturn of stocks by 0.6 million tonnes (mt)during January to September 2002 which would reduce the world total to atwo-year low of 3.26 mt," said the Oil World publication in its March 22issue released Thursday.

"Following the spectacular increase in world palm oil production andsupplies during the past three years, the biological-yield cycle of thepalm trees is trending downward," it said.

It appears, however, that insufficient rainfall is becoming another stressfactor, reducing the palm trees' productivity and it would show up inlower production in 2002 and 2003.

"At least a moderate El Nino has developed, but meteorologists are stillundecided about its further progress," the publication said.

According to Oil World, some analysts indicate that the El Nino effectwould be only moderate, while others recall the more severe El Nino of1997/98, which had devastating effects on palm oil and lauric oilproduction in Malaysia, Indonesia and the Philippines.

Continued drought conditions in Malaysia are of great concern for the palmoil industry. -- BERNAMA