INDONESIA SEES 2001 PALM OIL OUTPUT AT 7 MILLION TONNES

SHANGHAI, June 7 (Reuters) - Indonesia, the world's second largest palmoil producer, plans to churn out seven million tonnes of the edible oil in2001, up from 6.5 million tonnes last year, its top trade official said onThursday.It also expects China's palm oil imports to rise to 1.5-1.6 milliontonnes in 2001, from 1.4 million tonnes last year, Indonesia's Minister ofIndustry and Trade Luhut Pandjaitan told Reuters in an interview."Our palm oil (output) is (usually) about seven to eight milliontonnes, but that was reduced a little because of the price of palm oillast year, which was so low," Pandjaitan said on the sidelines of ameeting of 21 Asia-Pacific Economic Cooperation trade ministers."So we reduced production, which might be like seven million tonnes(this year)," he said.Pandjaitan is hoping China, a major palm oil buyer, would import morethis year to prop up sagging prices.Palm oil prices have been hovering at 15-year lows, with the benchmarkMalaysian August futures closing at 796 ringgit ($209.47) a tonne,up two ringgit, on Thursday."So far, they (China) imported 1.2 million tonnes from Malaysia andIndonesia. We do hope that we can increase it to 1.5-1.6 million tonnes intotal," he said.Industry sources have said China issued 600,000 tonnes of import quotasfor the first half of this year in January and an additional 100,000tonnes was added later, some say in May.

BID TO LIFT PRICESThe sources said they expected import quotas for the second half wouldbe about the same as the first six months at 700,000 tonnes, although theymight not be issued in one lot.Officials from Malaysia and Indonesia, the world's largest palm oilproducers, headed to China in late April in an apparently fruitlessmission to prod Beijing to import more.Although Beijing kept mum on how much they would import this year,Pandjaitan said there were no immediate plans to visit Beijing again."We understand that China gave a very good response towards the requestto increase quota," he said. "We'll just wait and see for a while."Pandjaitan also said Indonesia was looking into whether to increaseexports taxes, an issue which had markets speculating.Indonesia imposes a three percent export tax on crude palm oil and aone percent tax on refined, bleached and deodorised (RBD) palm oil, RBDpalm olein and crude olein.But Indonesian traders have said a tax increase was unlikely as itwould be counterproductive to government efforts to boost its revenue fromexports to help offset its huge budget deficit."Now we export about 50-60 percent of raw material, and very littlefrom the downstream industry," Pandjaitan said."Now, our economy has not yet recovered, but we do hope that in thiscoming two-three years we will reduce our exports and bring the price ofpalm oil to a better level," he said.