14/06/2011 (Bloomberg) - Palm oil prices may fluctuate at current levels as production from Indonesia continues to grow, the nation’s trade minister Mari Pangestu said.

“Prices have gone pretty much to its peak,” Pangestu told Bloomberg Television in Jakarta today. “Now, it’s probably going to be stabilizing and maybe just fluctuating around the current level. I think it will still be above a $1,000.”

Palm oil prices have declined 19 percent from a 35-month high of 3,967 ringgit ($1,304) a metric ton on Feb. 10 on prospects of increased supplies from Indonesia and Malaysia, the largest producers, due to favorable weather. The August-delivery contract gained 0.6 percent to 3,259 ringgit a ton on the Malaysia Derivatives Exchange today.

Indonesia’s production is expected to continue growing at the current rate of 10 percent to 12 percent each year, Pangestu said. Output this year may rise 8.2 percent to as much as 23.8 million tons, researcher Oil World said in March. Indonesia may produce 25.4 million tons of palm oil in the year beginning Oct. 1, up from 23.6 million a year earlier, according to the U.S. Department of Agriculture’s Foreign Agricultural Services.

Exports to China may decline “a little bit” as demand wanes amid signs of a cooling economy, Pangestu said. Still, Indonesia has other markets such as India, which is “growing rapidly,” and is also exploring new markets, she said. The country will also look into increasing domestic processing, she said.