INTERVIEW-Indonesia's SMART sees 2013 palm oil output rising by up to 10 pct

* SMART output seen up 5-10 percent in 2013 due to tree maturity * Indonesia ports struggle to cope with weather, demand fluctuations * Indonesia's palm stock levels at more than 4 million tonnes By Michael Taylor NUSA DUA, Indonesia, Nov 30 (Reuters) - Indonesia's biggest palm oil producer SMART expects its 2013 output to rise by as much as 10 percent on the year to around 2.4 million tonnes as more plantations mature, a company executive said on Friday.

SMART, or PT Sinar Mas Agro Resources Technology, is likely to produce about 2.2 million tonnes of palm oil this year, Susanto, chief executive of the company's West Kalimantan operations, told Reuters.

"For next year, hopefully there will be an increase of 5-10 percent," Susanto said on the sidelines of the 8th Annual Indonesian Palm Oil Conference.

"We have new areas and more mature areas, especially in Central Kalimantan," he added.

SMART runs the Indonesia palm oil operations of its Singapore-listed parent Golden Agri-Resources .

The company had earlier estimated output to rise by about 8 percent a year over the next five years.  Susanto manages 30,000 hectares of palm plantations in West Kalimantan, producing 40,000-45,000 tonnes this year. He said that volume is likely to rise 10-15 percent in 2013.

Malaysia and Indonesia account for about 90 percent of the world's annual palm oil production of about 45 million tonnes.

This year, Europe's financial woes coupled with an economic slowdown in top buyers India and China, have cut demand for the edible oil and pushed inventories in second-largest producer Malaysia to record highs.  The rising stocks have shaved a quarter off the value of palm oil futures this year, and many analysts at the conference see little let-up in early 2013.

 HIGHLIGHTS
-Analysts call the palm oil market Indonesia palm oil consumption to rise
 INTERVIEW
-Indonesia palm output up 7 pct Palm prices set for volatile 2013 Palm oil market report

INFRASTRUCTURE UPGRADE Palm oil stocks in Indonesia, the world's top producer, are more than 4 million tonnes at present and capacity is between 5-6 million tonnes, said Joelianto, trading director at SMART.

To offset falling demand, government officials in Indonesia have called on the palm industry to build bigger storage capacity, and increase domestic use of biofuels.

Joelianto, however, said the biggest challenge to the industry in Indonesia was the lack of bigger waterways and new ports to quickly ship out palm oil and ease high stock levels.

"The government has not done anything concrete yet," said Joelianto, adding that many palm firms were now building their own jetties. "We need more infrastructure, especially deeper ports that can handle bigger volumes." Earlier this month, the Indonesian Vegetable Oil Association said modernising Indonesia's state-owned ports was crucial to handle the rapidly expanding refined palm oil output.

Crude palm oil shipments were also affected by dry weather conditions and falling water levels on a river in West Kalimantan in June.  "If Indonesia's palm oil (output) is growing by 2-2.5 million tonnes per year, we must have ports that can handle that kind of volume," Joelianto said.

(Additional reporting by Niluksi Koswanage; Editing by Miral Fahmy) ((michael.taylor@thomsonreuters.com)(+62)(0)(21 3199-7170)(Reuters Messaging: michael.taylor.thomsonreuters.com@thomsonreuters.net)) Keywords: INDONESIA PALM/SMART

November 2012 Palm Oil Export 1.66 Mln Tons Up 3.8%

By Shie-Lynn Lim

  KUALA LUMPUR--Malaysia exported around 1.66 million metric tons of palm oil in November, an increase of 3.8% from a month earlier, cargo surveyor Intertek Agri Services said Friday.
  The figure is a tad higher than market expectations of 1.62 million-1.65 million tons. Intertek estimated October exports at 1.60 million tons. Another surveyor, SGS (Malaysia) Bhd., is expected to issue its estimate for November later in the day.
  The following are the major items in the Intertek estimate:
  (All figures in metric tons)

                                   November         October
   RBD Palm Olein          726,368         540,453
   RBD Palm Oil              124,035         124,640
   RBD Palm Stearin        164,863         134,301
   Crude Palm Oil            412,380         548,250
   Total*                       1,663,092       1,600,545

   Major importers of Malaysian palm oil:

   China                          533,480         250,200
   European Union          284,450         371,879
   India & Subcontinent    292,450         446,515
   Middle East                 108,320         111,246

*Palm oil product volumes don't add up to total as some products aren't
included.

  Write to Shie-Lynn Lim at shie-lynn.lim@dowjones.com

  (END) Dow Jones Newswires
  November 29, 2012 22:55 ET (03:55 GMT)


  Copyright (c) 2012 Dow Jones & Company, Inc.

Dorab Mistry On CPO Futures Down 7% In 4 to 6 Weeks Time For Stronger Demand

 By Shie-Lynn Lim

  Palm oil, the world's cheapest available cooking oil, must drop 7% in the next four to six weeks to attract demand and lead to a decline in record stock levels, top vegetable oil analyst Dorab Mistry said Friday.
  Reiterating a forecast earlier this month, Mr. Mistry, who also heads the vegetable oils trading desk at Godrej International Ltd., said prices need to drop to 2,200 ringgit a metric ton "in order to attract massive energy demand so as to reduce and clear stocks."  Once stocks are cleared and demand improves, prices could rise to as much as MYR2,600/ton by February, he said.
  Benchmark palm oil futures on Malaysia's derivatives exchange have slumped 26% so far this year as slowdowns in China and the European Union curbed demand for the tropical oil, which is used to make a wide variety of products from toothpaste to noodles and biodiesel. The fall in demand pushed stockpiles to a record high in Malaysia, the world's no. 2 producer. Over the next few weeks, output will likely rise in top producer Indonesia, weighing further on prices. "Indonesian production is running ahead of [my] expectations. Output is peaking this month in November and looks likely to exceed my estimate of 27.5
million tons for 2012," Mr. Mistry said in a prepared speech ahead of a conference in Bali.
  He also maintained Malaysia's production at 18.4 million tons this year. Production in Indonesia and Malaysia, which together account for more than 80% of global production, will continue to expand in the year ahead "since there has been no major weather disturbance. Production in September-December could rise to new highs, possibly creating new monthly production records in both countries."
  He expects Malaysian production to recover to 19 million tons in 2013 and pegs Indonesian output between 29.5 million and 30 million tons. During the 2012-13 marketing year that began Oct. 1 , global consumption may grow by about 4 million tons, outpacing supply growth of 3.2 million tons.  Incremental demand will exceed supply, but Mr. Mistry doesn't expect a sharp surge in prices next year.
  "We started the new oil year with the heaviest stocks in history. The massive overhang from the previous year will cushion the impact of lower vegetable oils production in the first half."  From March, a recovery in soft oils production and the anticipation of major soy, canola and sunseed crop harvests "will prevent any thoughts of a price rally" in global vegetable oils, he said.  Rival soyoil, which competes with palm oil for similar export markets, may trade in a $900-$1,020/ton range from May 2013, compared with offer prices of $1,105/ton earlier this week, he said.

  Write to Shie-Lynn Lim at shie-lynn.lim@dowjones.com

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  (END) Dow Jones Newswires
  November 29, 2012 21:56 ET (02:56 GMT)


  Copyright (c) 2012 Dow Jones & Company, Inc.