JAKARTA, Jan 5 (OANA/Xinhua) -- Indonesia's crude palm oil (CPO)production is predicted to reach 10.4 million tons this year, higher thanlast year's 9.9 million tons, which will allow the country to boost CPOexport.

Indonesian Palm Oil Producers Association (Gapki) chairman Derom Bangunsaid over the weekend that the increase in CPO production would be theresult of the expansion of CPO plantation areas from 1999 to 2000.

The 500,000 extra tons produced this year would allow Indonesia to boostexports of the commodity as local consumption is predicted to remainsteady at 3.5 million tons a year.

"The number of industries in the country that use CPO as a raw material,such as in cooking oil, soap and oleo industries, has not increased overthe past few years. Therefore, we predict that the (local) consumptionrate of CPO will remain unchanged this year," Derom was quoted Monday byThe Jakarta Post as saying.

With the additional output, Indonesia can increase exports to countrieslike China, India, Pakistan, Bangladesh, the Netherlands and new marketssuch as eastern Europe.

Indonesia is also optimistic that exports to China will increase sinceChina has raised its export quota from 2.4 million tons last year to 2.7million tons in 2004.

"Over the past few years, China's living standards have improved due tothe country's economic progress, and we therefore hope that it willincrease its edible oil consumption," said Derom.

Apart from Indonesia, China also imports CPO from Malaysia. Both countriesare the biggest CPO producers in the world.

As of June last year, Indonesia exported 329,000 tons to China andMalaysia took the rest of the quota.