Indonesia palm exports seen up as much as 9 pct in 2013 -industry

JAKARTA Mon Jan 7, 2013 11:45am IST

JAKARTA Jan 7 (Reuters) - Palm oil exports from Indonesia, the world's biggest producer of the edible oil, may rise by as much as 9 percent this year, a top industry association official said on Monday, as improving global economic conditions boosts demand.

Palm oil exports were little changed in 2012 at 16.5 million tonnes but this will rise to between 17 million-18 million tonnes in 2013, Fadhil Hasan, executive director at the Indonesian Palm Oil Association (GAPKI), told Reuters.

"After the first half, if there is an improvement in the global economy and a rise in (crude) oil ... maybe around 17 million-18 million tonnes," said Hasan.

Late last year, GAPKI forecast that Indonesia's palm oil production would rise 7 percent this year to 27 million tonnes.

Palm oil is used mainly as an ingredient in food such as biscuits and ice cream, or as biofuel. Indonesia and Malaysia account for about 90 percent of global production.

Demand for the edible oil eased last year due to the global economic slowdown, which has led to record-high inventories. Benchmark palm oil futures notched its worst annual performance since the financial crisis in 2008, losing more than one-fifth.

Hasan said that current palm oil inventory levels in Southeast Asia's largest economy were between 3 million-4 million tonnes versus typical levels of around 1.5 million tonnes.

He urged the government to scrap a two-year moratorium on forest clearing that is due to end in May.

Indonesia imposed the moratorium under a $1 billion climate deal with Norway aimed at reducing emissions from deforestation. The moratorium has curbed the expansion of palm plantations in the country and impacted the economy negatively, industry officials say.

"The moratorium to some extent, just gives a negative perception that our managing of the plantations is not good," Hasan added. (Reporting by Michael Taylor; Editing by Muralikumar Anantharaman)

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