JAKARTA, May 1 Asia Pulse - Indonesia plans to export 40,000 tons of palmoil to Russia in May-July under a countertrade agreement signed by theleaders of the two countries last week.

The agreement to trade Russian Sukhoi aircraft for Indonesian productswould be worth US$16.5 million, of which US$15 million will be paid byIndonesia in the form of palm oil, said Derom Bangun, chairman of theAssociation of Indonesian Palm Oil Businessmen (Gapki).

In addition to palm oil, Indonesia will also trade 26 other products,including vegetable fat, palm stearin, stearin, crude palm oil (CPO),rubber, textiles, cacao, tea, coffee, computers, electronic equipment,bauxite, plastic housewares, black pepper, white tin, fruit, fish and fishproducts and chemical products.

Derom said a number of major palm oil companies had expressed theirreadiness to participate in the countertrade if the price offered by Bulog(State Logistics Agency) was reasonable.

"The price of palm oil offered (by Bulog) should match the internationalprice. But it would be normal if Bulog included additional costs foradministration, shipping and warehousing," Derom said.

The CPO price in Rotterdam on Monday was recorded at US$407.5 a ton, whilethe commodity's fob price at Indonesian ports ranged between US$370 andUS$380 a ton.

Derom predicted the CPO price would increase slightly during the next fewmonths due to increased world demand.

Under the countertrade deal with Russia, palm oil producers would onlysend their products to Indonesian ports while the further process of theirdespatch to Russia would be handled by Bulog.

Bulog had set certain conditions for palm oil producers to participate ina tender for the export to Russia.

One condition was the ability to meet demand and another that the companyconcerned has never failed to pay taxes.

Derom said he could not predict the total amount of palm oil export toRussia under the countertrade deal.

"It is possible that within the next three months, the amount of palm oilfor export will decline as other commodities have been prepared for thetrading," he said, adding that most Russian businessmen wish to buy palmoil rather than other products.

Indonesia decided to buy two SU-27 and two SU-30 Sukhoi warplanes, and twohelicopters worth a total of US$192.9 million from Russia through acountertrade mechanism.

Jakarta has already paid US$26 million in advance while the rest will bepaid through countertrade transactions until August, 2004.