Total global palm oil supplies are set to fall 2.5M tonnes for October-December 2016 compared with the same period a year ago, Thomas Mielke, Editor-in-Chief of Oil World predicted at the Globoil conference in India on 22-23 September.

He said total supplies comprised both stocks and production and the prospects of recovery of palm oil production in October following the drought effects of El Niño would be offset by very low stocks of palm oil.

"World export supplies of palm oil from October to March will not increase as physical supplies of palm oil are insufficient to satisfy the same export demands as last year."

The world would need to rely on palm oil exports for the next six months as soyabean oil exports were expected to stagnate.

This would create difficulties for those who had not covered their edible oil requirements for November and December and could drive prices higher.

Crude palm oil prices could rally to or above 3,000 Ringitts/tonne; RBD palm oil (fob Malaysia) could reach a high of US$800/tonne in the next four to eight weeks and Argentine soyabean oil US$800-820.

However, there was no room for production losses in these estimates.

Mielke stressed that although global production of the 17 major oils and fats would rise by 10.5M tonnes from 203.7M tonnes in 2015/16 to 213.7M tonnes in 2016/17, this boost would not solve the world's supply problems as almost half of the increase would be eaten up by reduced opening stocks.

Consumption would increase by a below average rate of 5M tonnes.

"We need to build stocks to more comfortable levels" but this would not happen in the short term to January/March next year.

And the industry needed another good season of above average production in all edible oils to reach more comfortable levels.

On world production of the major 10 oilseeds, Mielke said production had doubled in the past 20 years and currently stood at 535.2M tonnes.

Soya production had grown 62% in the past 20 years, rapeseed 11%, sunflowerseed 9%, cottonseed 7%, copra and palm kernel 4% and groundnuts 6%.

India accounted for just 6% of world production and in 2015, prices had fallen below production costs for many farmers.

The Indian soyabean crop was expected to recover to 9.5M tonnes this year from 7.1M tonnes last year.

However, crushing would be limited to supplying the domestic market because of the inability of crushers to export their soya meal.

Atul Chaturvedi, the CEO of India's Adani Wilmar and new president of the Solvent Extractors' Association of India, said the Indian vegetable oil industry was in the "intensive care unit".

Imports of edible oils stood at 15M tonnes, some 70% of the country's needs, while the refining industry was still suffering, with capacity utilisation standing at 30-35%.

The country was flooded with refined palm olein and oilseed cultivation had stagnated at 28-30M tonnes.

"The tragedy is that while the area under GM crops is not small as 11M ha are under GM cotton, we continue to defer planting of GM soya and mustard."

Chaturvedi said he sincerely hoped that the recent clearance of GM mustard in the country would be taken up.

He added that the duty difference between imports of crude and refined oils needed to be increased to 15% from the current 7.5% to prevent the refining industry from collapsing.