JAKARTA (June 24 2003) : Indonesia, the world's second- largest palm oilgrower, expects to produce 9.5 million tonnes in 2003, up 100,000 tonnesfrom last year, the Indonesian Palm Oil Commission said on Monday.

Output would increase because mature oil palm trees had started to producefresh fruit and cultivation was supported by favourable weather, the headof day-to-day operations, Rosediana Sumatra told Reuters.

"We predict there's a slight increase this year making output seen at 9.5million tonnes," Sumatra said.

However, Sumatra said if the coming dry season, which normally runs fromJuly to August, stretched to September, it might hit palm oil output.

"If we have a prolonged dry season, then it will affect the outputforecast," she said.

The newly formed commission comprises members from industry groups andgovernment officials.

The associations represented include the Indonesian Palm Oil Association(GAPKI), the Palm Oil Growers Association, the Indonesian Edible OilAssociation and the Palm Oil Research Institute.

Sumatra also said that production of the key commodity had risen graduallyin recent years. "Output reached to 9.4 million tonnes in 2002, comparedto 9 million in 2001."

Of that, around 6.3 million tonnes were exported mainly to India, Europeand China at 1.5-1.7 million tonnes, 1.5 million tonnes, and 450,000tonnes respectively, she added.

Rival Malaysia is expected to produce 12 million tonnes of crude palm oilin 2003, up from 11.91 million tonnes in 2002.

It exported 10.8 million tonnes last year, up 2.5 percent from2001.-Reuters