Gapki upbeat with CPO target

Gapki upbeat with CPO target

The Jakarta Post, Jakarta

The Indonesian Palm Oil Producers Association (Gapki) is
optimistic this year's crude palm oil (CPO) output target of nine
million tons and export target of about 5.5 million tons will be
met.

"There are no changes in our predictions, and with most of the
country's growers and plantation firms achieving their targets we
are optimistic," Derom Bangun, chairman of the association, told
The Jakarta Post on Sunday.

Derom said the expected increase in this year's CPO output was
the result of a bumper harvest from trees planted between 1996
and 1998.

Indonesia, the world's second largest palm oil producer after
Malaysia, produced 8.3 million tons of CPO last year and exported
some 4.9 million tons.

According to Derom, CPO output in December will only reach
700,000 tons, mainly due to the holidays during the month.

"But this will not influence this year's target because in
September, the peak of the harvest, one million tons of CPO was
harvested," Derom said.

Derom said the country's CPO output was likely to increase
again next year, with palm trees planted in 1999 and later
expected to begin production.

"But the increase will not be as great as this year," he said.

He said CPO output growth was limited because many growers had
put off expansion plans for their plantations since the economic
crisis hit the country in the middle of 1997.

Derom also predicted the price of CPO would remain strong in
2003.

"A reduction in the supply of sunflower oil will increase the
demand for CPO, thus keeping its price strong," he said.

He said the price of CPO had been on the rise since April,
when it stood at about US$350 per ton.

As of November, CPO prices stood at about $440 per ton. In
1997, the price of CPO was at the $600 level.

He said the increase in CPO prices was also due to the rising
demand from large CPO buyers, including India and China. These
two countries buy CPO from Indonesia and Malaysia.

The association earlier said Indonesia was expected to export
some 1.6 million tons of CPO to India and some 720,000 tons to
China this year.

Many worry the increase in CPO prices could prompt local
producers to export more of their products, thus creating a
scarcity at home that would push up the price of cooking oil, a
basic commodity for many Indonesians.