KUALA LUMPUR, Aug 22 (Reuters) - Crude palm oil prices are seen averaging at 2,678 ringgit per tonne in 2016, up nearly 18 percent from last year, boosted by demand from top consumer India and replenishment of stocks by China, according to the Malaysian Palm Oil Council (MPOC).
Benchmark palm oil prices on the Bursa Malaysia Derivatives Exchange have surged 11.3 percent so far this month on the back of tight supplies and improving export data.
Palm futures closed 0.1 percent higher on Friday at 2,578 ringgit ($643).
"In 2016 palm oil prices will average at 2,678 ringgit per tonne, stabilising in a range between a low of 2,162 ringgit and a high of 3,195 ringgit," said Yusof Basiron, the chief executive of MPOC, in remarks posted online for a palm oil seminar.
The forecast price, up from palm's year-to-date average of 2,528 ringgit, is on the back of strong demand from the world's two largest consumers, according to Yusof.
India will maintain its position as the world's largest consumer and importer of palm oil, he said, while China is expected to import more oils and fats for the rest of the year.
"The utilization of the high carryover stocks in China caused them to import less oils and fats especially in the first half of 2016, but imports will be increased to replenish stocks in the second half of 2016," said Yusof.
Palm oil shipments from Malaysia, the world's second largest producer after Indonesia, rose 26.5 percent in the first 20 days of August from the same period in July on improving exports to India.
Yusof also pegged Malaysia's output at 19.1 million tonnes this year and Indonesian production at 32.8 million tonnes.
"(Malaysian) production from August onwards is expected to be higher as the dryness associated with effects of El Nino in early 2016 no longer hampers the production of palm oil," he said.
Rapidly rising palm oil prices, however, could narrow its spread with rival soyoil, reducing its competitiveness. The share of palm oil in India's edible oil imports is already seen falling to a record low in this marketing year, as its price rally slashes its discount versus soyoil.
Palm's discount to soy is around $110, compared with a spread of $140 a year ago. ($1 = 4.0105 ringgit) (Reporting by Emily Chow; Editing by Muralikumar Anantharaman)