6/12/05 JAKARTA, (Asia Pulse) - Indonesia's crude palm oil (CPO) production is expected to increase by one million tons to 14.3 million tons in 2006, an executive said here on Sunday.

"In 2006, the world's CPO production is predicted to increase by five per cent. About one million tons will come from Indonesia," Director of PT Astra Argo Lestari Benny Tjoeng said. 

He said Indonesia's current CPO production was about 13.3 million tons annually while national consumption reached four million tons. So, there were about seven million tons that could be exported to increase the country's foreign exchange reserves.

Benny said the CPO price on the world (Rotterdam) market was expected to hover at around US$450 per ton.

He said competition would be tight next year but opportunities would also increase following the lifting of the quota system for CPO export to China, one of the world's largest markets.

But Benny expressed concern that the imposition of export tax on CPO based on Government Regulation No. 35/2005 would weaken Indonesia's CPO competitive edge on the world market. (ANTARA)