06/09/04 JAKARTA (Dow Jones)--Indonesia's exports of crude palm oil toIndia are set to fall 20% this year, due to strict import rules, theIndonesian Palm Oil Producers association said Monday.

The country is expected to export 1.7 million metric tons of CPO toIndia this year, down from 2.2 million tons last year, said Derom Bangun,the association's chairman.

"Indonesian producers prefer to sell their (CPO) elsewhere."

Indonesia hopes India will relax the import rules, which require CPOexported to India to contain at least 500 milligrams of beta carotene perkilogram, higher than international norms.

"We propose 400 milligrams per kilogram," Bangun said

Indonesia's CPO exports are also under pressure from an increase inIndia's domestic vegetable oil production. Vegetable oil can be used as asubstitute for CPO.