Sinar Mas sees 2.3 mln T palm oil output in 2011

* Output in Indonesia seen at 23 mln T in 2011 - Widjaja

* Unilever calls for global palm oil sustainability standards (Adds details, comments) 

Indonesia's Sinar Mas expects to produce 2.3 million tonnes of palm oil this year, or about 10 percent of the country's total, said Franky Widjaja, head of the conglomerate's agribusiness and CEO of Golden Agri-Resources (GAR). 

GAR had around 435,000 hectares of palm oil plantations in 2010, and targets expansion of 40,000 hectares per year, the firm said in February. 

"Indonesia's total is about 23 million tonnes," Widjaja told Reuters on the sidelines of a World Economic Forum event in Jakarta on Monday, when asked about 2011 output. 

"For ourselves, I think about 10 percent of that," he added. "We were producing around 8-10 percent of the (overall) production (last year)." 

Palm oil giant Sinar Mas Agro Resources & Technology, or SMART , runs the Indonesia palm oil operations of its Singapore-listed parent GAR. 

SMART had 134,765 hectares of palm oil plantations in Indonesia's Kalimantan and Sumatra in June last year. 

Last year, SMART released an independent audit after Greenpeace alleged that the company bulldozed high conservation value forests and damaged carbon-rich peatlands.

Major palm oil consumers such as Unilever (UNc.AS) , Nestle and Burger King stopped buying from SMART because of environmental concerns. 

"I'm very encouraged by some of the major companies here, and Pak Franky's company as well on the commitment he makes to zero peat development in Indonesia," Unilever Chief Executive Paul Polman said at the event. 

GAR said earlier this year it would work with the Indonesian government and non-profit organisation The Forest Trust in a bid to boost its green credentials.

GLOBAL PALM STANDARDS

Indonesia is seen as a key player in the fight against climate change and is under intense international pressure to curb its rapid deforestation rate and destruction of carbon-rich peatlands. 

Indonesia's agriculture ministry said in April that it planned to issue Indonesian Sustainable Palm Oil (ISPO) certification to cover the operations of planters amid pressure from green groups to halt deforestation. 

The Roundtable on Sustainable Palm Oil (RSPO), which groups planters, green groups and consumers, is the only other major group to have set up green standards for the industry.

But unlike RSPO, which does not impose sanctions on members that violate its voluntary standards, those found to be breaking ISPO rules will be punished by law, a ministry official said in November. 

"What we have to watch is that the Indonesia standards for sustainable palm oil are not going to be different from the Roundtable standards," added Polman. 

"Companies like ours, which cannot control where we buy from and where the product goes, cannot operate with five or ten different standards for every country ... You have to have global standards." 

Earlier this year, the new secretary general of the RSPO described the ISPO as "excellent" and said it would compliment the RSPO.

Speculative trading in commodities is also a hot topic for both food producers and consumers, with some governments looking to limit speculative positions held by traders.

"We have to really stop this speculation but still we need the platform to really trade," Widjaja said. "The commodity will need an exchange to do the trade, but this has been misused by a lot of fund managers, by using computer trading."

"They just trade and you can see it is very volatile -- sometimes it's not based on fundamentals anymore." Source: Reuters