11/08/2008 (Flexnews), Jakarta - Indonesia, the world's top palm oil producer, expects its crude palm oil output to rise to 19.4 million tonnes in 2009 as more trees mature and the cultivation area expands, Agriculture Minister Anton Apriyantono said on Monday.
The minister also said Indonesia should play a role in stabilising palm oil prices, which have been faltering in recent weeks, by pushing for the use of the oil as alternative energy.
Indonesian producers expects crude palm output to top 18 million tonnes of crude palm oil this year.
"Production may increase as more palm oil trees are maturing and there is an expansion of plantations," Apriyantono told reporters, adding plantations had being expanding by 500,000 hectares (1.236 million acres) a year.
The goverment's forecast for 2009 production is slightly below producers' forecast of 20 million tonnes.
"We can push for the use of palm oil for biofuel to increase demand. This can be a factor to stabilise both local and global prices," he said.
Malaysia and Indonesia announced recently plans to cooperate in a biofuel development programme and may use the same biofuel specifications and amount of blending.
The world's top two palm oil producers together account for more than 80 percent of the world's crude palm oil output.
Malaysia has the capacity to produce up to 1.5 million tonnes of biofuel a year, but produces only 100,000 tonnes. Indonesia's state oil firm, Pertamina, uses a blend of 2.5 percent palm biodiesel and 95 percent petroleum diesel, and plans to increase the blend to 5 percent, depending on the biofuel price.
Malaysian palm oil prices fell as much as 4.3 percent to a new 10-month low on Monday, as faltering energy and vegetable oil markets encouraged a sell-off, despite good export data from cargo surveyors.
Prices of the vegetable oil, which have slipped more than 12 percent this year, may drop even further on a combination of weaker crude oil prices, bumper crops for soybeans and palm oil.