INDONESIA SAYS CHINA AGREES TO RAISE PALM OIL QUOTA

JAKARTA, June 12 (Reuters) - Indonesia said on Tuesday China had agreed toraise its palm oil import quotas this year, a move that is expected tolift prices from their current 12-year lows."I met the Chinese trade minister at APEC (Asia-Pacific EconomicCooperation) recently and he told me that China has agreed to raise palmoil import quotas for Indonesia and Malaysia," Trade and Industry MinisterLuhut Pandjaitan told a parliamentary hearing.The meeting of 21 APEC trade ministers was held in Shanghai last week.Pandjaitan said he hoped the present full-year quota of 1.2 milliontonnes from Malaysia and Indonesia could be increased by up to 400,000tonnes."I don't know how much the increase will be. But hopefully the (total)quota could be raised to 1.5 to 1.6 million tonnes this year," Pandjaitansaid.It is difficult to track the volume of China's palm oil imports underthe quota system.Industry sources said in January China issued 600,000 tonnes of importquotas for the first half of this year, topping it up with an extra100,000 tonnes last month.Pandjaitan said the increase could help lift world prices by as much as30 percent.Malaysia's benchmark palm oil futures contract, August, was quoted at818 ringgit a tonne in late afternoon trade, up 12 ringgit."We expect an increase of 30 percent in CPO prices in coming months ifChina buys more palm oil."The quota increase follows a mission of Malaysian and Indonesianofficials to China in late April to prod Beijing to raise its imports.