MUMBAI, June 7 (Reuters) - Palm oil stocks in Malaysia, the world's second biggest producer, are likely to fall further in the coming months as festival demand cuts into supply, a trade body executive said on Thursday, potentially supporting prices for the edible oil.
Malaysian Palm Oil Council Chairman Lee Yeow Chor said there had been a slew of orders ahead of the Muslim holy month of Ramadan, when fasting in the day is followed by elaborate feasts at night.
Strong orders ahead of Ramadan, which begins in the third week of July and heralds the start of the festival season in Asia, could help negate the impact of the euro zone debt crisis on demand for the oil.
"Demand will improve in the next two months due to Ramadan. Pakistan and India will buy more," Lee, who is also the head of Malaysian palm oil firm IOI Corp , told reporters at a conference in Mumbai.
Largely reinforcing Lee's views, a Reuters survey on Wednesday showed Malaysia's palm oil stocks probably dropped 2.9 percent to 1.79 million tonnes in May, the lowest since April 2011.
Lee also said the Southeast Asian country's palm oil output in 2012 is likely to hover at 19 million tonnes, almost flat from 18.9 million tonnes a year ago. Exports will probably edge higher, he said, without giving an estimate.
Thanks to tighter palm oil supply, Lee sees spot prices from 3,000 to 3,200 ringgit in the next three months.
Benchmark August palm oil futures on the Bursa Malaysia Derivatives Exchange had fallen 1.4 percent to 2,962 ringgit per tonne by 0830 GMT on Thursday.
Prices touched a trough of 2,925 ringgit on Monday, their lowest since Nov 2, 2011.
