26/06/2008 (AFP), Jakarta — High global prices for palm oil mean good times ahead for Asian producers over the next 12 to 18 months but little growth in much-touted biofuels, credit rating agency Moody's said on Thursday.

"A rapid rise and continued high prices for crude palm oil (CPO) during the past 18 months have strengthened balance sheets in Asian palm-oil producers, who responded by buying more plantations and increased planting of greenfield properties," Moody's said in a report.

But while the doubling of CPO prices between January 2007 and March 2008 have left major producers with healthy balance sheets, the high cost of feedstock means biofuel projects have been delayed, it said.

Indonesia and Malaysia, which together supply 86 percent of the world's CPO, are predicting six percent rises in output to 34.9 million tons.

But the agency warned the market appears to be cyclical, curbing producers' enthusiasm for further expansion.

The CPO price on the key Bursa Malaysia Derivatives on Thursday was 1,108.75 dollars, down roughly 25 percent from record highs earlier this year.