JAKARTA (April 05 2003) : Indonesia's East Kalimantan province plans toplant one million hectares of palm oil near the border of rival producerMalaysia, a senior official from the ministry of Eastern Indonesiadevelopment said on Friday.

Indonesia, the world's second-largest palm oil producer, currently hasaround 3.3 million hectares planted to palm oil across the country.

"The East Kalimantan governor has told our ministry they are planning toplant one million hectares of palm oil near the border with Sarawak,"deputy minister Made Astawa Rai told Reuters.

"The investors will come from Malaysia and Indonesia. The prospects aregood. Our ministry will present this proposal to President MegawatiSukarnoputri," he added.

He said the project aimed to improve the welfare those living in EastKalimantan, on the island of Borneo.

Indonesia is forecast to produce 9.6 million tonnes of palm oil in 2003,up from 9.0 million tonnes in 2002.

The bulk of that is produced in South Sumatra. Indonesia expects to exportmore than six million tonnes of palm oil this year, up from 6.5 milliontonnes in 2002.-Reuters