Indonesian crude palm oil exports are likely to increase to 12-13 million tonnes in 2008, compared with 11.1 million tonnes last year, a senior executive at the agriculture ministry said on Tuesday. Indonesia is the largest palm oil producer, after overtaking Malaysia last year, with an output between 17.0-17.2 million tonnes.
"Crude palm oil exports in 2008 should be more than last year's due to increasing production and smaller domestic consumption," Ahmad Mangga Barani, director general at the agriculture ministry, said by telephone.
In July, the Indonesian Palm Oil Producers Association forecast the country's crude palm oil exports in 2008 would reach 14.5 million tonnes. However, Barani said the progressive export tax introduced may mean crude palm oil exports do not reach this level.
Indonesia plans to impose progressive export taxes of up to 25 percent on crude palm oil if international prices top $1,100 a tonne. The move is part of new government measures unveiled on Friday to contain rising prices of staples, targeting palm oil-based cooking oil, wheat flour, rice and soybeans.
Barani said the ministry expected crude palm oil production to reach 20 million tonnes by 2010. Crude palm oil makes up 45 percent of the country's palm oil exports. Higher priced palm oil-by products such as RBD palm olein make up the rest.
Indonesia plans to expand its oil palm plantations by 350,000 hectares (864,900 acres) this year which should raise crude palm oil output in five years, the time needed to start producing oil.
Indonesian currently has 6.7 million hectares of oil palm plantations. Made by crushing fresh fruit, the reddish-brown oil is the world's second most popular oil after soy and is used in the production of a wide range of products from toothpaste to ice cream and biofuel.