8/12/06 (AFP)-- Indonesia is aiming to overtake Malaysia as the world's largest producer of palm oil by 2008, Vice President Jusuf Kalla said  Dec. 7. "In 2008, our palm oil production should be number one," Kalla  said.  He said Indonesia was currently the second largest producer after Malaysia although it had a much larger area for plantations. The two countries account for 85% of world production.

To achieve the goal of top producer Kalla said the government was not only allowing new plantation areas but had also launched a revitalization program for existing plantations.  He said the move was particularly aimed at producing more raw material for the production of bio-fuel. The government will provide subsidized low-interest loans to encourage the development of palm oil plantations.

Indonesia produced 13.3 million tons of palm oil in 2005 and is aiming for 14 million tons this year.

Malaysia is on track to hit a new record of 15.1 million tons this year amid strong demand from the global food, bio-diesel and oleochemicals industries.