Crude palm oil (CPO) output in Indonesia, the world's largest producer of the edible oil, is expected to rise 14 percent to 25.7 million tonnes this year, the agriculture ministry said on Monday. Earlier on Monday, the ministry said in a statement 2011 crude palm oil production was 22.5 million tonnes.
For cocoa, this year's output is seen almost doubling to 1.3 million tonnes, with coffee set to rise 13 percent to 718,000 tonnes, the ministry added. "It is slightly higher than what the market is expecting," said Ivy Ng Lee Fang, a Kuala Lumpur-based CIMB analyst on the 2012 government forecast. "The market is looking at 8-10 percent."
"The young (plantation) areas have matured and are going into a higher yielding age group," she added. "People are not neglecting their estates. The only thing to prevent CPO production from rising perhaps, is poor weather." Last week, the Indonesian Palm Oil Association said it expected crude palm oil output to increase 6 percent to 25 million tonnes due to rising plantation areas.
CPO exports from Indonesia dropped 5 percent to 19.4 million tonnes last year, the agriculture ministry added, highlighting rising domestic consumption. Key hurdles in Indonesia's palm oil sector include difficulties in bank financing, poor infrastructure and relatively low productivity, said Gamal Nasir, director-general of plantation at the agriculture ministry.
He did not give a reason for the percentage moves for 2012. Rising demand for palm oil - used in cosmetics, cookies and ice cream - has led to deforestation that has prompted an Indonesian moratorium on new permits to clear forests from May last year. In August, Indonesia raised the minimum for the crude palm oil export tax to 7.5 percent from 1.5 pct previously.
For cocoa, output in Southeast Asia's largest economy is forecast to hit 1.3 million tonnes this year from 712,230 tonnes last year, the ministry said, while exports dropped 31 percent to 384,000 tonnes in 2011. Indonesia, the world's No 3 cocoa producer, is battling disease and adverse weather conditions, which have hampered the country's cocoa supplies. Cocoa bean exports from Indonesia's main growing island of Sulawesi slumped almost 60 percent in the whole of 2011, industry data showed last week.
Lynette Tan, an analyst at Phillip Futures in Singapore said: "For the past few years it hasn't been the best years for cocoa in Indonesia." "It will be somewhere between last year's (figure) to one million," she added. "It won't be more than one million."
Early last year, Indonesia was hit by an abnormally wet rainy season, which wreaked havoc on its cocoa crop and hampered a $350 million programme launched in 2009, to boost production to more than 600,000 tonnes within five years. "The cocoa programme that they have implemented - they are probably looking for it to bear some fruit, but I'm not so sure because weather will play a very big role," Tan said.
"In terms of other commodities, from the farmer's side, they are better off growing other things compared to cocoa." Indonesian rubber output is seen falling 11 percent to 2.7 million tonnes this year, from 3.1 million tonnes last year and 2.7 million tonnes in 2010, the agriculture ministry said.
Rubber exports increased to 2.62 million tonnes last year, from 2.42 million tonnes in 2010, it added. "There is a relatively small increase in output because of slow expansion on rubber plantations since there is tripartite agreement to restrict plantation expansion," Nasir said on 2011, adding most rubber plantations were relativelReuters.
The world's top three rubber producers - Thailand, Indonesia and Malaysia - are part of the International Tripartite Rubber Council that normally uses supply cuts and export curbs to help support prices. Earlier this month, the Indonesian Rubber Association said output in the world's second-biggest producer would rise 6 percent this year to 3.27 million tonnes. The country's coffee output slipped to 633,990 tonnes in 2011 from 686,920 tonnes in 2010, with exports at 387,870 tonnes versus 433,600 tonnes.
Indonesia is the world's fourth-largest coffee producer after Brazil, Colombia and Vietnam, and the world's No 2 robusta coffee producer after Vietnam. A combination of heavy rains and hot weather hurt the flowering season last year, sending coffee stock levels and exports sharply lower.