MEDAN, N. Sumatra, April 21 Asia Pulse - Indonesia's crude palm oil [CPO]production is expected to increase from 9.9 million tons in 2003 to 10.4million tons in 2004, chief of the Indonesian Palm Oil ProducersAssociation (GAPKI), Derom Bangun, said.

"Our prediction is based on the increasing trend in demand as well as theprice of CPO and its derivaties in the international market in the pastfew months," Derom said here Tuesday.

Of the 10.4 million tons to be produced, seven million tons would beexported and three million tons allocated for domestic consumption,including the edible oil industry.

Currently, the largest market for Indonesian palm oil is India, followedby the European Union, East Europe, China and Pakistan.

China had reportedly provided import quota of 2.6 million tons for palmoil in 2004, higher than the quota in 2003 at 2.4 million tons.

However, Derom said Indonesia might not be able to benefit from China'simport quota due to tight competition with other producers, includingMalaysia.

Indonesia's export of palm oil to China in 2004 is predicted to reach 25per cent of the total import quota set by the country, Derom said.

The CPO price in the international market during the past few weeks hadtended to slightly fluctuate. The CPO price cif Rotterdam last week wasUS$5,325 per ton.