04/10/04 - Jakarta (Bloomberg): Indonesia, the world's second largestcrude palm oil producer, may raise its output by 4.8 percent in 2005 asfarmers and plantations increase planting of the crop, Indonesianofficials said.

Indonesia may produce 11 million metric tons of the edible oil in 2005compared with 10.5 million tons in 2004 as farmers extract more oil fromthe crops, said Rosediana Suharto, executive chairman of the IndonesianPalm Oil Commission, a government marketing agency.

Palm oil extraction rates have risen as much as 7 percent, she toldreporters in Jakarta. Indonesia's palm oil output was 9.9 million tons in2003 and it exported 6.5 million tons.

Indonesia earned US$2.4 billion from palm oil exports in 2003, and saleswill probably rise this year and in 2005, Minister of Agriculture BungaranSaragih told delegates at a palm oil forum earlier.

As Indonesia increases its palm oil planting area, it has the potential toovertake Malaysia as the world's biggest producer, Bungaran said.

"In the 1980s our planted area was 400,00 hectares and in 2003 our plantedarea was 4 million hectares," Bungaran said.