04/10/04 JAKARTA (Dow Jones)--The Chinese government will raise its quotafor Indonesian palm oil imports to 1.5 million tons in 2005 from 1.2million tons this year, a senior official said Monday.

Andriana Supandy, head of the economic division at the IndonesianEmbassy in China, said the Chinese government will increase the quota forpalm oil imports due to rising demand.

"China is growing to like palm oil more than other edible oils becauseit's cheaper and there is technology that can improve palm oil quality,"Supandy said.

The total palm oil import quota will be 3.17 million tons for 2005, upfrom 2.7 million tons for this year. Palm oil imports within the quota areonly subject to an import duty of 9%. The Chinese government levies a dutyof 52.4% on palm oil imports above the quota.

With China a member of the World Trade Organization, it will scrap thepalm oil import quota by January 2006.

China imported 3.3 million tons of palm oil in 2003 valued at $1.45billion.

Malaysia is the largest palm oil exporter to China, followed byIndonesia.