Nusa Dua, Indonesia, Dec 4 - Indonesia, the world's largest palm producer, could see output rise by 8 to 8.5 percent in 2009 to 20.25 million tonnes, a top industry official said on Thursday.
Output growth is expected to slow next year as producers boost replanting activities and apply less fertiliser in the face of weakening palm oil prices, Derom Bangun, executive chairman of the Indonesian Palm Oil Producer's Association (GAPKI), said.
Prices of palm oil, which is used in making products ranging from cakes to cosmetics, have fallen nearly two-thirds from a record of 4,486 ringgit ($1,233) per tonne as crude markets falter and a global recession deepens.
"So we are expecting farmers to apply less fertilisers, so growth rate is expected to be slower, at 8-8.5 percent (in 2009) compared to more than 10 percent this year," Bangun told an industry conference in Bali.
This year production was seen at 18.8 million tonnes, or 1.8 million tonnes more than 2007, he said.
But the association's forecast is still much higher than the government forecast of 19.4 million tonnes for next year.
The financial crisis will set the tone for palm oil prices, Bangun added.
"For 2009, my cautious figure for average palm oil price CIF Rotterdam would be $500-$600 per tonne but if the current crisis deepens, the price could fall below $450," Bangun said.
On Wednesday, crude palm oil traded in Rotterdam for Jan/Mar 2009 delivery fell $15 to $490 per tonne, Reuters data showed.