The Indonesian government said this month that Singapore listed Wilmar International would invest $900 million to build factories in Indonesia to produce palm products such as soap and margarine.

Wilmar has a total area of more than 235,000 hectares in the country and also plans to develop a 200,000-hectare sugar plantation in Papua.

The benchmark May crude palm oil contract on the Malaysia Derivatives Exchange hit a near three-year high at 3,967 ringgit ($1,307) last week on worries about the impact of rains on output.

Prices have gained about 50 percent over the last six months and

Indonesia exported 15.6 million tons of palm oil products in 2010, with byproduct exports at 6.8 million tons and crude palm oil at 8.7 million tons, according to the Association of Indonesian Palm Oil. Global palm output is 45 million tons.

Indonesia outpaced Malaysia to become the top palm oil producer in 2007, though the move toward the downstream comes as firms may now face slower upstream expansion as a planned two-year moratorium on forest clearance aims to curb greenhouse gas emissions from rampant deforestation.

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Posted by Shayne Heffernan on Feb 22nd, 2011and filed underAsia, Heffernan Capital Management, Latest News, News & Events, Shayne Heffernan.You can follow any responses to this entry through theRSS 2.0You can leave a response by filling following comment form or trackback to this entry from your site