[Kabar-indonesia] 19 RI Biz/Econ Reports: US$1.4B Poultry Losses; Bear Stearns Downgrade; SBIs

[JoyoNews at aol.com]

19 Reports:

- Bird flu inflicts 13 trillion rupiah 
  (US$1.4 bln) loss to Indonesian 
  poultry business
- Bear Stearns Upgrades Thailand, 
  Downgrades Indonesia
- Bank Indonesia awards 44.83 trln rupiah 
  1-mth SBIs at fixed rate of 11.25 pct
- Indonesia's Aug domestic cement sales
  down 1.1 pct [previously sent]
- Indonesian October car sales forecasts
  to increase
- U.S.-Europe deadlock remains despite 
  new proposal to revive world trade talks 
- Indonesia's Bank Jabar plans IPO,
  bond issue
- Bank Indonesia to promote BPRS to aid
  rural economic sector
- 25 smallholder credit banks under Bank
  Indonesia's supervision
- Stock alert - Indonesia's retailers higher on
  strong consumer demand prospects
- Indonesia Sari Husada Baby Food Co To
  Delist From Exch
- Indonesia's Indosat to launch 3G service in
  November
- Indonesian cell phone sales total 9.6 mln
  units annually: Exec
- Desktop sales top contributor to Dell's
  Indonesian earnings
- 80% of Indonesia's forwarding companies
  facing bankruptcy: Association
- Bayer to boost production of hybrid rice
  seeds in Indonesia
- Indonesia's imports of fish meal forecast
  to rise by 21.4%
- Indonesia crude palm oil down on Malaysia,
  olein firm
- Interview-Bursa Malaysia mulls dollar-based
  palm oil contract

Bird flu inflicts 13 trillion rupiah (US$1.4 bln) 
loss to Indonesian poultry business

JAKARTA, September 20 (Xinhua) -- Indonesia's poultry industry has
suffered a loss of at least 13 trillion rupiah (around 1.4 billion
U.S. dollars) since bird flu outbreak was confirmed in 2004, which
caused chicken meat and egg prices to fall sharply, an executive said
Wednesday.

"In February-March 2004, chicken meat price even lunged to 1, 800 per
kg from 7,000 rupiah. The 1,800 rupiah of price made up a mere 12
percent of the production costs," said Hartono, chairman of the
National Poultry Market Information Center.

Chicken meat prices dropped again in July-October 2005 to send a blow
to small and medium-scale chicken farming businesses, he was quoted by
the national Antara news agency as saying.

Meanwhile, government anti-bid flu team head Bayu Krishnamurti said
the loss was calculated from chicken growers alone.

"It doesn't cover the impacts on poultry-related industries and
tourism and the increasing investment risk in Indonesia," he said.

------------------------------------------------------------

excerpt: Bear Stearns downgraded Indonesia from overweight due to high 
valuations, lower average yield, deteriorating earnings consensus and recent reform 
setbacks.
"In contrast to Indonesia's commodity intensivity, Thai exports are better 
diversified against the risk of a less buoyant global commodity-price 
environment over the medium term..." 

The Associated Press 
September 20, 2006

Bear Stearns Upgrades Thailand, Downgrades Indonesia

WASHINGTON -- Investment bank Bear Stearns & Co. on Wednesday 
upgraded Thailand to "overweight" and downgraded Indonesia to "market 
weight."

"In our view, reduced political uncertainty after Tuesday's military coup 
simply adds to an already compelling story," in Thailand, according to a note 
issued by Michael Kurtz from Bear Stearns Asia Ltd.

Kurtz cited Thailand's relatively low valuations, highest average dividend 
yield in the region, and recent improvements in domestic economic fundamentals 
as further reasons for the upgrade.

On Tuesday, a bloodless coup in Thailand ousted the unpopular caretaker prime 
minister and left the chief of the army in charge. Those developments "could 
speed a resumption of decisive governance that boosts already sagging consumer 
and business spirits," Kurtz wrote.

Bear Stearns downgraded Indonesia from overweight due to high valuations, 
lower average yield, deteriorating earnings consensus and recent reform setbacks.

"In contrast to Indonesia's commodity intensivity, Thai exports are better 
diversified against the risk of a less buoyant global commodity-price 
environment over the medium term," according to Kurtz. "Thailand also displays strong 
and growing linkages to the Japanese economy, recovery of which we believe will 
prove largely, although surely not completely, insulated from a Fed-induced 
2007 moderation in U.S. growth."

---------------------------------

Bank Indonesia awards 44.83 trln rupiah 
1-mth SBIs at fixed rate of 11.25 pct

JAKARTA, September 20 (XFN-ASIA) - Bank Indonesia said it 
has awarded 44.83 trln rupiah worth of one month Bank Indonesia 
Certificates (SBIs) at a fixed rate of 11. 25 pct.

Today's auction absorbed 100 pct of the bids.

The 1-mth SBI rate is pegged to the benchmark BI rate, which 
was cut by 50 basis points on September 5.

-------------------------------------

Indonesia's Aug domestic cement sales down 1.1 pct

JAKARTA, September 20 (Reuters) - Indonesia's domestic cement
consumption fell 1.1 percent from a year ago to 3.06 million tonnes,
industry data showed on Wednesday.

The country's cement sales have been declining this year as the
economy has slowed following a government decision to sharply hike
domestic fuel prices last October to scale back a crippling subsidy
bill.

Sales in the main island of Java declined by 4.9 percent to 1.9
million tonnes while PT Semen Gresik Tbk , the country's largest
cement maker, saw its sales falling by 1.1 percent to 1.43 million
tonnes last month.

August's sales took Indonesia's year-to-date total sales to 20.4
million tonnes, nearly 3 percent lower than the same period last year.

Some industry experts predict the industry will have flat to lower
growth in 2006 compared with last year's 31.51 million tonnes, where
when volumes expanded by 4.9 percent.

------------------------------------------------------------

Indonesian October car sales forecasts to increase

JAKARTA, September 20 (Asia Pulse/Antara) - Car sales on the domestic
market are forecast to rise to 30,000 units in October after a 28.2
per cent surge to 28,063 units in August.

Sales this month are predicted to be around the same as in August.

The lowering of the benchmark interest rate by Bank Indonesia will
strengthen the purchasing power of consumers, president of car
distributor PT Indomobil Niaga International Soebronto Laras said.

Earlier this month the central bank cut the reference rate by 50 basis
points to 11.25 per cent and it said the rate would be cut further to
around 10 per cent by the end of this year.

Car sales declined sharply until July this year following a 100 per
cent hike in oil prices late last year. Sales began to rise in August
after hitting rock bottom in the previous month.

Laras said new models launched by car maker and sales agents will also
contribute to the increase in sales in the next months.

---------------------------------------------------------

Indonesia's Bank Jabar plans IPO, bond issue

JAKARTA, September 20 (Reuters) - Indonesia's largest regional
development bank in terms of assets, PT Bank Jabar, said it plans to
raise around 1.55 trillion rupiah ($169.6 million) from a listing of
its shares and a bond issue.

Umar Sjarifuddin, the president director of the lender, said late on
Tuesday that Bank Jabar plans to offer 20 percent of its shares in
2007 to raise 800 billion rupiah and sell 750 billion worth of bonds
by the end of this year.

The bank will use the proceeds from the initial public offering to
expand its lendings while the bond issue will be used partly to pay
its 300 billion rupiah of debts which mature in 2007.

"We are planning to issue the bonds in October or November. We will
conclude the bond issue first before we go ahead with the IPO. Maybe
in the second half," Sjarifuddin said.

The bank, which manages around 15.5 trillion rupiah worth of assets,
is aiming to increase its outstanding loans to 12 trillion rupiah by
the end of this year from around 10.9 trillion rupiah as of June.

The provincial government of West Java controls 54.39 percent stake in
the bank while the rest is held by the Banten provincial government
and regencies from the two provinces.

------------------------------------

U.S.-Europe deadlock remains despite 
new proposal to revive world trade talks 

CAIRNS, Australia, Sept. 20 (AP): The senior American trade official on 
Wednesday said an Australian proposal aimed at reviving global trade talks had 
potential, but a top European negotiator rejected it outright, saying it asks too 
little of Washington.

Responses to the plan unveiled at a meeting in Australia of the Cairns Group 
of 18 agricultural exporting countries, appeared to cement differences between 
the United States and the EU that have pushed the global trade negotiations 
to near-collapse.

The Cairns Group members are Argentina, Australia, Bolivia, Brazil, Canada, 
Chile, Colombia, Costa Rica, Guatemala, Indonesia, Malaysia, New Zealand, 
Pakistan, Paraguay, the Philippines, South Africa, Thailand and Uruguay.

The cornerstone of the Australian plan is that the EU would agree to better 
by 5 percent its current offer to reduce farm tariffs, while the U.S. would 
agree to cut subsidies for its farm industry by US$5 billion (euro3.9 billion).

U.S. Trade Representative Susan Schwab, speaking on the sidelines the Cairns 
meeting, said she would not endorse any specific goals, but that the 
principles underlying the plan were acceptable.

The Australian plan's "proposal that has both more market access and more 
cuts in domestic support is ultimately the right way to go," Schwab told The 
Associated Press. "I think it has potential to move the conversation forward."

But Carlo Trojan, the European Union's top negotiator at the World Trade 
Organization, rejected the plan, saying the cuts it required of the United States 
were too small.

"It won't fly, it is not acceptable to the EU," Trojan said. "What the 
Australians are asking from America is too little." Trojan and Schwab were expected 
to hold talks on the sidelines ofthe meeting on Thursday, though no 
breakthrough is expected. 

However, U.S. Agriculture Secretary Mike Johanns said he would meet EU Trade 
Commissioner Peter Mandelson in the United States next week.

The Cairns Group, which accounts for more than 25 percent of the world's 
agricultural trade, is expected to endorse the Australian plan on Friday, in the 
hope it will breathe new life back into the global talks, which were suspended 
in July becauseof the impasse over the agricultural sector. 

--------------------------------

Bank Indonesia to promote BPRS to aid rural economic sector

JAKARTA, September 20 (Asia Pulse/Antara) - Indonesia's central bank,
Bank Indonesia (BI) will continue its efforts to promote Smallholder's
Credit Banks (BPRs) in order to spur the development of micro, small
and medium-scale enterprises enabling the rural economic sector to
make progress in the long run, a BI official said.

"People have pinned high hopes on BPRs. They want BPRs to develop the
rural economic sector by providing them with funds to make their
living in the agricultural and husbandry fields and to lend money to
Indonesian migrant workers (TKI)," BI director for BRP supervision
Irman Djaya Dalimi said in Jakarta on Tuesday.

Therefore, he said, the central bank will hold workshops in some
regions to give people the opportunity to listen to BPR officials who
had successfully developed productive sectors in rural areas.

"So far, BPRs have not been truly interested in funding productive
sectors except trade, services and consumption. So we will encourage
them to finance agricultural and husbandry activities in rural areas
as they had successfully done in West Java," he said.

Dalimi said BI would also hold workshops in Java and Sumatra islands
as well as East Nusatenggara province on how to finance Indonesian
migrant workers.

The three regions were regularly sending migrant workers overseas.

By July 2006, Indonesia had 1,935 Smallholder's Credit Banks with
1,515 of the figure located in Java and Bali.

In a survey carried out jointly by the central bank and the Promotion
of Small Financial Institutions (Profi) from November 2005 to January
2006, it was found that 75 per cent out of the total number of BPRs
had assets worth less than Rp7.3 billion (US$800,000) each and only 5
BPRs owned assets worth more than Rp10 billion.

It also showed that most of the Smallholder's Credit Banks saw an
increase in the number of their customers but 36 per cent of the total
number of BPRs faced a decrease in total accounts.

----------------------------------------------------------------

25 smallholder credit banks under Bank Indonesia's supervision

JAKARTA, September 20 (Asia Pulse/Antara) - Up to last July, Bank
Indonesia (BI) or the central bank put a total of 25 smalholder credit
banks (BPRs) under special supervision because their capital addequcy
ratios (CARs) had dropped, a BI official said.

The CARs of part of the banks had dwindled to lower than 4 per cent
and the cash ratios of some of them had declined to less than three
per cent in the past six months, Irman Djaja Dalini, BI director for
BPR monitoring, said here Tuesday.

"Twenty-five of a total of 1,935 BPRs have been under close
supervision. The number of ailing BPRs is relatively small, however.
We will stop monitoring them if they are able to increase their CARs,"
Irman said.

Some 11 out of the 1,935 existing BPRs were located in Bandung, one in
Semarang, two each in Solo, Banda Aceh, Surabaya and Malang, and five
in Jakarta.

In 2005, ailing BPRs increased their CARs or merged with one another
and thereby freed hemselves from BI supervision.

"Some 200 BPRs merged with each other in 2005. Some 20 more merged
with one another last July," Irman said.

Despite the existence of the 25 ailing BPRs, smallholder's credit
banks' performance in general was sound as their CARs were recorded at
an average of 18.93 per cent and loans-to-deposits ratio (LDR) was
79.4 per cent, he said.

BPR assets were recorded at a total value of Rp21.4 billion (US$2.3
million) , their credits at Rp16.45 billion, savings at Rp4.24 billion
and deposits at Rp10.5 billion.

The amout of gross non-performing loans (NPL) was recorded at 9.52 per
cent and that of net NPLs at 7.17 per cent last July, increasing from
9.25 per cent in NPLs and 6.94 per cent in net NPL respectively last
June.

Irman said an increase in NPLs was experiences by smallholder's credit
banks in quake-hit provinces like Yogyakarta and Central Java.

---------------------------------------------------------------

Stock alert - Indonesia's retailers higher on strong consumer demand prospects

JAKARTA, September 20 (XFN-ASIA) - The country's major retailers were
higher on hopes of strong consumer demand from the upcoming Idul Fitri
and Christmas festive season, dealers said.

PT Matahari Putra Prima was up 40 rupiah or 4.94 pct at 850, PT
Ramayana Lestari Sentosa was up 20 or 2.22 pct at 920 and PT Mitra
Adiperkasa was up 40 or 4.21 pct at 990.

"These stocks would normally rally ahead of the festive seasons in the
fourth quarter," said Ryan Ariadi Suwarno, an analyst with Dongsuh
Kolibindo.

He said the expected strong demand during Idul Fitri, that falls in
October, as well as Christmas, will keep retailers and consumer goods
stocks attractive in the fourth quarter.

---------------------------------------------------------

Indonesia Sari Husada Baby Food Co To Delist From Exch

JAKARTA, September 20 (Dow Jones)--Indonesian baby food firm PT Sari
Husada (SHDA.JK) said late Wednesday it plans to withdraw its listing
on the Jakarta Stock Exchange.

Sari Husada submitted its "Go Private" application to the bourse and
Indonesia's securities regulator Tuesday, a company statement said.

"We are committed to following all the prevailing laws and regulations
for the delisting...and to provide an opportunity for our valued
shareholders to sell their shares and receive a fair return on
investment," Sari Husada president director Budi S. Isman said in the
statement, without elaborating.

The delisting plan is unlikely to cause much of a ripple on the
Jakarta Stock Exchange Composite index because only 1.33% of Sari
Husada's total shares were publicly listed.

"Consequently, Sari Husada's shares have experienced very low trading
activity and low volumes in recent years, the statement said.

The statement said the delisting decision followed a "thorough
assessment" of the firm's strategic direction and the perceived
benefits of continuing as a listed company, without providing any
additional details.

Sari Husada is a unit of Dutch baby food and clinical nutrition
company Royal Numico NV (37561.AE). A Numico subsidiary, Nutricia
International BV, owns 98.67% of Sari Husada's total shares.

The statement didn't if minority shareholders would be bought out.

----------------------------------------------------------

Indonesia's Indosat to launch 3G service in November

JAKARTA, September 20 (XFN-ASIA) - PT Indosat, the country's second
largest telephone operator, will launch a third generation (3G)
cellular service in November, company director Witiasmoro Handayanto
said.

"We have completed the operational feasibility testing (stage) and we
are now awaiting the grant of 3G certification from the government,"
he told reporters.

Initially, the service will be available only for customers in the
country's two largest cities Jakarta and Surabaya.

Handayanto said Indosat has allocated around 30-40 mln usd for its
initial spending on the new service.

He added that Indosat is aiming to build 300 base transceiver stations
(BTS) by year-end.

--------------------------------------------------------

Indonesian cell phone sales total 9.6 mln units annually: Exec

JAKARTA, Sept 20 Asia Pulse - Indonesian cellphone sales total 9.6
million units annually, with local and foreign firms investing money
for production due to the healthy sales, PT Inti Prisma Internasional
director Martono Jaya Kesusma said.

Speaking after a ceremony where his company received an award from the
Indonesian Musuem of Recrods (MURI), Martono said the conducive
climate spurred PT Inti Prisma Internasional to produce 100,000 local
cellphones in the first six months of this year.

PT Inti Prisma Internasional makes the cell phones under the brandname
of Nexian.

The company is now planning to increase its production to 200,000 by
the end of this year and to 500,000 in 2007.

Martono expressed confidence that his firm would be capable of
reaching the target late this year as state telecommunication company
PT Telkom had already placed an order for 72,000 cell phones.

To reach the target, PT Inti Prisma Internasional has set up a factory
in the Karawang region in West Java with an investment of US$20
million.

Nexian is the only locally-made cellphone is Indonesia supported by
South Korean technology, Martono said.

-----------------------------------------------------------

Desktop sales top contributor to Dell's Indonesian earnings

JAKARTA, Sept 20 Asia Pulse - Personal computer producer Dell has
projected its desktops to contribute most of its earnings to
Indonesia, followed by its laptops and servers, a spokeperson said.

"The production of desktops ranks first, reaching 70 per cent, laptops
20 per cent and servers 10 per cent," Megawaty Khie, Dell Country
Manager of Indonesia Representative Office, said here on Tuesday.

Megawaty also said that desktops would give a big contribution to the
world's No.1 PC producer, but its market share ranked second in
Indonesia.

As part of its promotion, Dell in collaboration with Intel and
Microsoft announced the beginning of Technology Update Roadshow held
in five Indonesian big cities -- Jakarta, Bandung, Yogyakarta,
Surabaya and Medan -- with distributors, authorized service providers
and customers as the target.

The roadshow is aimed at informing on the latest developemnts in
hardware and software.

At the same time Dell introduced its latest products, namely the
desktop OptiPlex 745 and server PowerEdge 9G.

The National Logistic Agency (Bulog) is one user which has derived a
benefit from information technology utilization to support its
business. The agency's management information system is now up to date
but it had no accurate data sent to the head office when it still used
conventional technology in 1970s.

"The agency's upgraded information technology infrastructure has
assisted in increasing its performance in maintaining availability and
stability of foodstuff prices," Mohammad Gunawan, head of the Bulog's
information technology, told reporters.

-----------------------------------------------------------

80% of Indonesia's forwarding companies facing bankruptcy: Association

JAKARTA, Sept 20 Asia Pulse - At least 80 per cent of the country's
forwarding companies are on the brink of bankruptcy as they could
stand up to face competition against foreign rivals.

The association of the forwarding companies (Gafeksi) said most of
1,700 forwarders in the Greater Jakarta area alone are preparing to
lay off thousands of their workers.

A Gafeksi executive Syarizal B.K. said the condition has been serious
for domestic forwarding firms.

Indonesian forwarders are in the category of small and medium
enterprises, therefore, they need government protection.

Another Gafeksi member Monang Sianipar said 60 per cent of freight
forwarders handling customs clearance already collapsed as foreign
rivals are allowed to handle their own custom clearance.

Sianipar urged the transport ministry to impose restrictions on
foreign forwarders operating in the country.

----------------------------------------------------------

Bayer to boost production of hybrid rice seeds in Indonesia

JAKARTA, Sept 20 Asia Pulse - PT Bayer BioScience Indonesia targets to
produce up to 200 tons of high yield rice variety seeds next year or a
five fold increase from 40 tons this year.

A company executive Sidi Asmoro said demand for hybrid rice seeds is
small in the country as it is not as widely used as in India, the
Philippines and Vietnam.

Sidi said India has expanded the use of hybrid rice seeds in the past
10 years and it used around 5,000 tons a year.

He said the use of hybrid rice seeds could increase productivity by 15 per 
cent.

Bayer is cultivation of hybrid rice seeds in three areas in the
country - Gorontalo, East Java and West Java and the experiment will
be expanded in Central Java soon, he added.

-------------------------------------------------------------

Indonesia's imports of fish meal forecast to rise by 21.4%

JAKARTA, Sept 20 Asia Pulse - Indonesia's imports of fish meal are
forecast to reach 85,000 tons next year up 21.4 per cent from an
estimated 700,000 tons this year.

Requirement is increasing especially for shrimp feed with the
expansion of shrimp farms in the country, the association of animal
feed companies (GPMT) said.

GPMT chairman Denny Indrajaya said the country's shrimp breeding farms
will be expanded 15.8 per cent annually to meet the production target
of 540,000 tons in 2009 , up from around 300,000 tons last year..

Imports of fish-meal has continued to increase as it is not yet
produced in the country, Denny said.

------------------------------------------------------------

Indonesia crude palm oil down on Malaysia, olein firm

JAKARTA, September 20 (Reuters) - Indonesia crude palm oil prices were
traded lower on Wednesday, dragged down by losses in Malaysian palm
oil futures, but olein was steady on demand ahead of the Muslim holy
month of Ramadan.

In North Sumatra's Medan, the main port for palm oil exports, crude
palm oil traded lower at 4,158 rupiah ($0.453) per kg compared with
4,170 and 4,180 rupiah on Tuesday.

"The market is very quiet today. Sellers were in hiding because of
major falls in Malaysia," a Medan-based trader said.

At the midday break, the benchmark third-month December <KPOZ6>
<0#KPO:> contract on the Bursa Malaysia Derivatives exchange fell 16
ringgit to 1,546 ringgit a tonne ($420) and later closed at 1,528
ringgit in the evening.

On the export front, sellers offered October shipments at $425 a tonne
free on board Belawan port, while bids stood at $417.5, without any
deals reported.

Falls in Malaysia also put pressure on the state marketing centre
tender in Jakarta, which failed to sell 2,000 tonnes of crude palm oil
due to low bids.

The centre, which sells palm oil from state plantations, offered 1,000
tonnes of crude palm oil FOB Belawan and 500 tonnes ex-factory Medan
at 4,154 rupiah a kg, but the highest bid seen was at 4,136 rupiah.

It also offered 500 tonnes of crude palm oil at 3,954 rupiah a kg FOB
Tayan in West Kalimantan province on the Indonesian side of Borneo
island, while the highest bid stood at 3,925 rupiah.

Some demands, however, supported cooking oil, which was marginally
higher at 4,730 rupiah compared with 4,700-4,725 rupiah on Tuesday.

"Buyers jumped into the market to anticipate increased demands from
households and the food industry during Ramadan and Eid al-Fitri," a
trader in Jakarta said.

------------------------------------------------------

Interview-Bursa Malaysia mulls dollar-based palm oil contract

By Lucy Hornby

BEIJING, September 20 (Reuters) - Bursa Malaysia is considering
launching a dollar-denominated palm oil futures contract as early as
next year, to head off potential competition from a rival backed by
the Chicago Board of Trade, a senior exchange official said on
Wednesday.

The Kuala Lumpur-based exchange will act to protect its leading
position in crude palm oil futures <0#KPO:>, which is increasingly
attracting attention from hedge funds as well as producers in
neighboring Indonesia.

A joint venture between CBOT and the Singapore Exchange , called the
Joint Asian Derivatives Exchange, or JADE, plans to offer palm oil
futures around the end of the year. Its first futures contract,
rubber, launches on Sept. 25.

The new contracts, if sufficiently popular, could draw liquidity away
from Asia's current rubber contracts in Tokyo and Singapore, and from
the palm oil contract in Malaysia.

"There's nothing much you can do about competition except fight back,"
Raghbir Singh Bhart, head of global markets for Bursa Malaysia, told
Reuters in an interview.

"We are actively looking at whether Bursa Malaysia should offer a
U.S.-dollar denominated contract. The central bank has been very
supportive, saying, 'yup, you guys can go ahead. So now the ball is
basically at our feet, as to when we are going to introduce it."

The contract could be introduced next year, he said. The exchange's
current palm oil contract is dominated in ringgit.

Previous experiments with dollar-denominated tin and palm olein
futures failed to take off. That had been at exchanges that preceded
Bursa Malaysia, a merger between the Kuala Lumpur Stock Exchange and
the country's commodity exchanges.

FOCUS ON INDONESIA

Palm oil hit a two-year high in August, trading above 1,600 Malaysian
ringgit ($434.8) but has since retreated.

By the midday break on Wednesday, the benchmark third-month December
<KPOZ6> <0#KPO:> contract on the Bursa Malaysia Derivatives exchange
fell 16 ringgit to 1,546 ringgit a tonne.

The exchange is also considering adding delivery points in Indonesia,
which would also facilitate trading by the growing number of
Indonesians trading the Malaysian contract. Their increased interest
in part stems from greater ties with Malaysian plantations, which
insist their Indonesian counterparts hedge exposure, Bhart said.

"They are obviously looking at Indonesians, so one way to head them
off at the pass is to have Indonesian delivery points."

After years in the doldrums, palm oil futures are now generating
increasing interest as governments pursue plans to use palm oil for
fuel. Malaysia and Indonesia agreed earlier this year to each set
aside 6 million tonnes per year of palm oil for biodiesel production.

Chinese consumption of the relatively cheap oil, used for cooking,
soaps and cosmetics, is also growing, while palm oil futures have got
an added boost from rising interest in commodities and commodity index
funds.

The Dalian Commodity Exchange in China is studying a palm oil futures
contract, to complement its soy complex, but has not yet decided
whether to offer crude or refined palm oil futures.

Open interest in Bursa Malaysia's crude palm oil futures, which
indicates the numbers of players in the market, has shot up over the
past few months to as high as 70,000 lots of 25 tonnes each. On
Wednesday, open interest was at 68,467 lots.

"We are very pleased to note that after all these years we've finally
got hedge funds now coming into our market," Bhart said.

Bursa Malaysia is also studying biodiesel futures, but is unlikely to
launch them in the immediate future, since most biodiesel plants were
still seeking approvals or under construction, Bhart said.

"Its certainly on our radar screen."

------------------------------------------
Joyo Indonesia News Service
------------------------------------------