JAKARTA, Oct 5 Asia Pulse - Indonesia will expand its palm oil plantationsin Kalimantan, Sulawesi and Papua, Agriculture Minister Bungaran Saragihsaid.

Most palm oil plantations in the country are found in Sumatra.

Saragih said over the next 30 years Indonesia should have 10 millionhectares of oil palm plantations, making it the largest palm oil producerin the world.

Indonesia is currently the second largest producer of palm oil behindMalaysia.

Saragih said palm oil could be used to produce not only cooking oil, soap,cosmetics and medicines, but also bio-diesel oil.

With the crude oil price soaring to around US$50 per barrel, bio-dieselfrom palm oil will be competitive, he said.

Saragih acknowledged the government has no funds to build moreplantations, making private sector involvement essential.

He said with exports valued at US$2.9 billion, palm oil ranked among thefour largest export commodities other than oil and gas and the largestamong agricultural commodities in the country in 2003.

The country production of crude palm oil (CPO) increased from year to yearfrom 5.6 million tons in 1998 to 10.6 million tons in 2003, up to anestimated 11.5 million tons in 2004.

(ANTARA)