Central Kalimantan to produce 1.4 million tons of CPO in 2007

Palangka Raya, C Kalimantan (ANTARA News) - Central Kalimantan province is expected to produce 1.4 million tons of crude palm oil (CPO) in 2007, an industry spokesman said.

"After the drop in CPO supply this year, we estimate that there will be high overseas demand for CPO next year. So, Central Kalimantan is ready to supply 1.4 million tons annually," Teguh Patriawan, chairman of Central Kalimantan`s Oil Palm Businessmen`s Association (Gapki), said here on Thursday.

He said in the past six months, there was a drop in CPO supply from two major exporting countries, namely Indonesia and neighboring Malaysia, due to an El Nino-induced prolonged drought affecting the two states` CPO production.

Patriawan expected that the CPO price would improve next year as demand for CPO, especially in China and European nations, would increase. CPO is among other things used as material to make bio-diesel energy.

China, which earlier needed CPO supply of around 1-2 million tons annually, would increase its demand to 5 or 6 million tons per year starting next year, he said.

Central Kalimantan has oil palm plantations covering a total area of 530,000 hectares and 24 CPO processing plants.

"Up to November 2006, CPO production reached 924,000 tons, an increase from last year`s 813,000 tons," he said.

The province was planning to plant oil palm in 14 districts on a total of 427,000 hectares of land over the next few years, he added.

He said he was optimistic that Central Kalimantan`s CPO production target of 1.4 million tons would be achieved in 2007 as four new CPO processing plants would become operational soon.

Having oil palm plantations on a total land area of 5.447 million hectares, Indonesia produces around 12 million tons of oil palm fruit per year. Malaysia which has a smaller oil palm plantation area turns out 15 million tons annually.