NUSA DUA, Indonesia, Nov 29 (Reuters) - Palm oil output in the world's biggest producer Indonesia is expected to climb 7 percent next year to 27 million tonnes, a top industry association official said on Thursday, as three years of acreage expansion efforts bear fruit.
Output of the edible oil is also forecast to end 2012 at 25.2 million tonnes, up from 23.5 million tonnes in 2011, Fadhil Hasan, executive director at the Indonesian Palm Oil Association (GAPKI), told Reuters.
"If 2013 is going to be like 2012 in terms of weather and climate, and there are no shocks in the supply, maybe output will be about 27 million tonnes," said Hasan, speaking on the sidelines at the 8th Annual Indonesian Palm Oil Conference on the island of Bali
"A lot of expansion has happened in the last three years or so, so now the trees are mature."
Palm estates sprawl across 8.2 million hectares in Indonesia
DEMAND WOES
Palm oil is used mainly as an ingredient in food such as biscuits and ice cream, or as a biofuel. Indonesia and Malaysia
Demand for the edible oil has fallen this year due to the global economic slowdown, which has led to record-high inventories. Benchmark palm oil futures have also lost a quarter of their value so far this year.
Indonesian palm oil stocks are currently between 2.5 million and 2.8 million tonnes, said Hasan. "We used to have one month of production as stock but maybe more than that now," he added
Palm producers are seeking new ways to generate demand, but their efforts may be hampered by renewed attacks by Western governments on the oil's green credentials.
Environmental groups have been critical of the expansion in the palm sector, which they blame for deforestation, speeding up climate change, ruining watersheds and destroying wildlife.
"The perception, especially from European countries, towards palm oil is worse than two or three years because of the intensity and scale of campaigns by NGOs," Hasan said.
The U.S. Environmental Protection Agency recently visited Indonesia to review the environmental aspects of its palm oil industry, while France
To improve its green credentials, Indonesia
Hasan urged the government not to extend the ban, which is due to end in 2013, saying it would damage the economy. The palm oil industry is one of the biggest in Indonesia
"We don't know exactly what is going to happen, but in the interests of the Indonesian economy we hope that the moratorium is not going to be extended," Hasan said.
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