31/12/2010 (Forex Yard) - Indonesia expects output of key plantation crops, including palm oil and rubber, to increase next year on the back of expanded acreage, improving yields and expected good weather, a senior agriculture official said on Thursday.

An unusually long rainy season this year has wreaked havoc on most of the country's plantation crops, tightening supply to global markets and driving up prices of rubber and palm oil.

Palm oil production from the world's top producer is expected to increase by 5.3 pct to 24.43 million tonnes in 2011 from an estimated of 23.2 million tonnes this year, said Gamal Nasir, director general of plantation crops at the agriculture ministry, in an end-year news conference.

The country's rubber production is forecast to grow by 1.12 percent to hit 2.711 million tonnes in 2011 from an estimated 2.681 million tonnes this year, he said.

"We expect production generally will be better next year although there is risk of floods, drought and disease because of global warming," said Nasir.

"Some plantation crops are vulnerable to the change, but crops like palm oil and rubber can stand it," he said.

Palm oil prices have risen 42.2 percent this year, underpinned by concerns of heavy rain curbing supply in Malaysia and Indonesia, and dry weather sapping soybean yields in South America.

A combination of heavy rains and dry weather in Thailand, Indonesia and Malaysia has hit production of tyre-grade rubber, forcing processors to fight over raw material.

Tokyo rubber futures rallied to a record of 419.3 yen on Monday on persistent worries about supply in the physical market, which have sent prices of tyre grade to all-time high at $5 a kg.

Indonesia expects coffee production to reach 709,000 tonnes in 2011, a 1.58 percent increase on an estimated 698,000 tonnes this year, said Nasir. Indonesia is the world's second largest producer of robusta, used in instant coffee.

The country's cocoa bean output is also expected to increase by 8.7 percent to 1.074 million tonnes in 2011 from an estimated 988,000 tonnes this year. Southeast Asia biggest economy is the world's third largest cocoa beans producer after Ivory Coast and Ghana.

Expansion of plantation areas and improving yield will also help boost output, Nasir added.