Plantation Companies Rush Abroad To Secure Land

Dow Jones News - 2007-01-09 11:43

January 9, 2007 (Dow Jones News) - Despite swelling coffers thanks to soaring commodity prices, Asian plantation companies can't find enough of the one asset they need most - land. Shortage of land at home is fundamentally changing the way these companies plan future expansion, in the process benefiting countries which still have arable land in plenty.

"The Chinese, the Vietnamese, the Thais, the Malaysians are all interested in planting (rubber) in other countries, because land is not available in their own countries," says Hidde Smit, secretary general of the International Rubber Study Group.

China's Hainan State Farms, for example, has established a rubber nursery in Myanmar as a first step and plans to develop 300,000 hectares of rubber plantations in Laos and Myanmar in less than ten years, with a total rubber output estimated around 500,000 tons.

In November, the state-owned Vietnam Rubber Group said it would lease 50,000 hectares of land in Cambodia to grow rubber, starting 2007. That area could be doubled in four years.

This follows upon another investment in Cambodia in April by Hainan State Farms, which leased 62,659 hectares of land, at a cost of CNY1 billion ($12 7 million), to grow rubber.

In the Philippines, two provincial governments from China plan to develop 200,000 hectares of land for rice and corn cultivation and another 40,000 hectares for a bio-fuel crop such as cassava or sugar cane. And in Indonesia, Malaysia's Sime Darby, now in the process of merging with two other state-owned palm oil giants, is working to double its land bank to 200,000 hectares by 2008.

"The biggest reason Malaysian companies come to Indonesia is land," said Witjaksana Darmosarokoro, director of the Indonesian Palm Oil Research Institute.

What began as a trickle is now a steady flow, expected to continue for years given the rising demand for these commodities.

While observers say it is difficult to foresee the scope and speed of this outward investment, none doubt the growth of foreign-owned plantations will boost output in general while shifting a significant proportion of production to lower-cost countries.

Strong Demand, High Prices Spark The Scramble

The rush to get trees into the ground as quick as possible began a few years ago but is accelerating now as commodity prices are at levels unseen in years or even decades in some cases.

With oil prices hovering above $60 a barrel, palm oil's potential as a biofuel, for example, has greatly expanded the scope for its use. Natural rubber supply, meanwhile, is expected to see a deficit in the next 6-10 years.

Demand for other commodities, such as sugar cane and corn which are linked to biofuels, has also risen with the run-up in oil prices.

Palm oil prices are currently around MYR2,000 a metric ton, the highest level since 1998 when prices averaged MYR2,377.

Natural rubber futures, meanwhile, rallied to a 26-year high in July during a supply crunch. While some of those gains have been surrendered since then, a widely expected supply deficit for the next 6-10 years will keep its prospects buoyant, analysts say.

To capitalize on these favorable trends, plantation companies need to find and develop land quickly, but this is becoming increasingly difficult at home.

Land suitable to grow rubber and oil palm, for example, is either saturated, as in China, coveted by real estate developers, or fragmented into small holdings, as in Malaysia, making consolidation into economic holdings difficult.

That has forced investors to look at countries so far considered risky investment destinations.

"The big problem is that the belt in which rubber grows is politically unstable," said industry veteran George Sulkowsky, managing director of Centrotrade, a rubber dealer with offices in Europe, the US and Southeast Asia.

Decades of isolation brought about by wars in Cambodia and Africa, autarchy in Myanmar and political upheavals in Indonesia and the Philippines have until recently kept most investors away from the plantation sector in these countries.

But that has also left these countries with "a lot of land ripe for outside investors," said Steven Schipani, a consultant to the Asian Development Bank.

New Investments To Ease Supply Shortages

The explosion of new investments by Asian plantation companies in neighbouring countries could help ease future shortages of palm oil and rubber, and by doing so, keep prices at levels that don't force consumers such as tire makers and energy users to seek substitutes.

According to IRSG's Smit, the new investments in rubber plantations might increase output by 1 million tons in the next 10 years, from around 9 million tons expected to be produced this year.

Similarly, palm oil's use as a biofuel has begun putting a strain on edible oil supplies, and Indonesia's vast potential to expand production offers some relief, said Dorab E. Mistry, director of Godrej International Ltd., part of India's Godrej Group.

While oilseeds have to compete for land with other crops in most parts of the world, "the one area where production does not face such competition is Indonesia," said Mistry.

But the prospect is not without risks.

Overproduction is the greatest danger presented by this new expansion, analysts said.

Consider as well that these investments may be converting rainforest into monoculture plantations, or transforming farmers into laborers.

There is also the issue of immigrant labor.

Following Chinese and Vietnamese investment to Laos, Cambodia and perhaps Myanmar will likely be immigrant farmers. NGOs in Laos say northern Laos is already under significant Chinese influence and that process will intensify once newly planted rubber trees are ready to be tapped in about six years from now.

"The government of Laos, lacking any sort of tools to analyze the rubber phenomena, has not even thought about this issue, said David Bluhm, an agro-forestry consultant, who co-authored a study on Laos' rubber industry for the German non-governmental organization GTZ. "(At) some point I think the government will have to ask itself some tough questions about rubber and social demographics."

(Allan Sun in Beijing, Reuben Carder in Jakarta and Benjamin Low in Kuala Lumpur contributed to this article.)

Indonesia's SMART, CNOOC, Hong Kong Energy sign renewable energy project

Jakarta (ANTARA News) - PT Sinar Mas Agro Resources and Technology (SMART) said it has signed a cooperation agreement with China National Offshore Oil Corporation (CNOOC) and Hong Kong Energy (Holdings) Ltd for the development of 5.5 bln usd renewable energy project.

The company said in a statement that the project will be developed in three phases over 8 years.

Under the terms of the deal, the parties agreed to develop a bio-diesel project, using crude palm oil as the raw material, as well as producing bio-ethanol using sugar cane and cassava as the raw materials.

Local governments in Kalimantan and West Papua have provided about 1 mln hectares of land to support the project, SMART told XFN Asia.

Indonesia ferry survivors rescued

The rescue has refocused attention on the search effort

BBC News

Fourteen survivors of a ferry sinking in Indonesia have been rescued from the sea nine days after their boat sank in a storm off Java, officials have said.

They were picked up in a life raft by a passing cargo ship 500km (310 miles) from where their ferry sank.

A fifteenth person died soon after the group was rescued near Bali.

The Senopati Nusantara car ferry was carrying more than 600 people from Borneo to Java when it sank. Poor weather hampered rescue efforts.

The 14 survivors have been taken to Makassar on the island of Sulawesi where port officials said they were very weak and dehydrated.

Strong currents

They survived by drinking rainwater and eating food supplies stored on the life raft, rescue officials said.

The BBC's Lucy Williamson, in Jakarta, says the news of the survivors has refocused attention on the rescue effort.

The search has been extended to the waters around the island of Bali, as stormy weather and currents have carried survivors hundreds of kilometres to the east of where the ferry went down.

About 235 survivors have been rescued so far, found on life rafts, small islands and oil rigs in the Java Sea.

A simultaneous search for a missing Boeing 737 passenger jet has revealed large metal objects on the seabed off the west coast of Sulawesi.

The plane disappeared from radars a week ago carrying 102 people.

Transport officials investigating the ferry disaster have been blaming the rough weather for the sinking.

One said last week she suspected that high waves had entered the ferry's car deck over the door, making the vessel unstable, the Associated Press news agency said.

Very few bodies have so far been found. A navy spokesman said hundreds of bodies were probably trapped on the lower decks of the ferry, AP reported.

Govt to set up PT PEN to achieve food self-sufficient

Jakarta (ANTARA News) - The government is planning to set up PT Pangan Energi Nusantara (PEN) to enable Indonesia to become self-sufficient in food especially in rice as well as to empower its farmers` economy.

"The plan is based on a strong will to improve the country`s food resilience by empowering the farmers` economy," State Enterprises Minister Sugiarto said after a visit to the country`s biggest rice mill belonging to PT Jatisari Srirejeki in Jatisari village, Cikampek district, on Saturday.

More than 65 years after the nation gained independence, the fate of Indonesian farmers had remained unchanged while Indonesia, in fact, had become more and more dependent on imported rice to meet its people`s need, Sugiarto noted.

Although Indonesian soil was fertile, its food resilience was still low and this was one of Indonesia`s big problems, he said.

Therefore, President Susilo Bambang Yudhoyono was giving top priority to efforts designed to raise domestic rice production to a level of two million tons so that dependence on imported rice could be reduced, the minister said.

"We, from several relevant ministries will discuss this program to help empower farmers` economy in a sustainable manner like what has been applied in Malaysia and Thailand," he said.

To make the plan run smoothly later, Sugiarto was trying to involve the National Logistics Agency (Bulog), Sang Hyang Sri, Pertani, BRI, domestic fertilizer producers, Askindo and Jasa Tirta as stakeholders in PT PEN.

"On Monday (Jan 8) some relevant ministries and agencies will discuss this plan to enable the country to become self-sufficient in food," he added.

PT PEN`s activitieis would have to do with efforts to provide financial assistance as it can act as a facilitator for farmers seeking capital beside providing agricultural information and consulting services , quality seeds and fertilizer to farmers.

Warnings keeping fishermen in port

The Jakarta Post, Cirebon, Semarang, Ambon

Thousands of fishermen in Cirebon, West Java, who have been unable to go out to sea because of extreme weather will receive cash aid from the government.

Weather warnings from the Meteorology and Geophysics Agency have also affected thousands of fishermen in Central Java, as will as disturbing ferry services in parts of the country.

Cirebon Regent Dedi Supardi said his administration had set aside Rp 1.03 billion to assist 12,800 fishermen in the regency.

Each fisherman will receive Rp 20,000 for each day they are unable to go out to sea because of extreme weather warnings from the meteorology agency.

"The money has been taken from the regency's disaster budget. Each fisherman will get Rp 20,000 a day ...," he said Friday.

He said the administration had formally banned fishermen from leaving port on those days the meteorology agency issued extreme weather warnings.

"The agency informs us that weather in the Java Sea will continue to be bad through Monday. The decision (to ban fishermen from leaving port) was made to prevent any accidents," he said.

He said the amount of compensation was based on the regency's official monthly minimum wage of Rp 600,000. He added officials would begin distributing the money through village units starting Friday.

"Since we prevented fishermen from going out to sea for four days (from Friday to Monday), it means they're entitled to Rp 80,000, or Rp 20,000 a day," Dedi said.

News of the government assistance was welcomed by fishermen.

"The amount might not be much but it will help us survive while we can't fish," said Samuji.

Weather warnings also have affected more than 150,000 fishermen in Central Java, with more than 82,000 fishing boats stuck in docks for the past week.

The head of marketing and business development at the Semarang office of the Maritime Affairs and Fisheries Ministry, Sartono Tirtodihardjo, said Friday a fishermen's cooperative in Central Java, Mina Baruna, had already distributed 711 tons of rice to assist fishermen in the province.

He said the cooperative had a Rp 2.9 billion budget to help fishermen in 16 regencies and cities during difficult times. He said the budget came from a 0.5 percent fee collect from fish auctions in Central Java.

Sartono said if the cooperative's budget proved insufficient, the provincial administration would step in to provide help for fishermen.

Meanwhile, Ambon Port in Maluku prohibited ferries and small ships from leaving the port Friday due to worsening weather.

On Tuesday, two small vessels sank in the waters of Maluku, killing five people. Two others remain missing but bad weather has hampered search efforts.

"We are not allowing ships to set sail because the weather is really bad," the port's administrator, Abraham Lesnussa, told The Jakarta Post on Friday.

He said waves were reaching a height of two meters. "We've warned residents to stay alert if they want to travel by ship. They should pay attention to weather conditions and not insist on traveling in bad weather."

Several ferries traveling between Hunimua Port in Salahutu district, Central Maluku, and Waipirit Port in Kairatu, West Seram regency, did continue services Friday.

This despite the provincial transportation office instructing all ports and ferry companies to halt services until the weather improved.

"Maluku waters are very vast and it would be hard to search for victims if there was a disaster because there is no first-class rescue fleet," said the office's head, Benny Gasperz.

Why does the haze come back every year?

The country emits 6.5 times as much CO2 from degraded peatland as it does by burning fossil fuels every year, the report said.

Alvin Darlanika Soedarjo, The Jakarta Post, Jakarta

Last year the annual haze in Sumatra and Kalimantan caused respiratory diseases, a month-long school holiday and an airplane accident. The haze is a continuing smoky gift that has spread itself across parts of Indonesia and neighboring countries for more than two decades.

It's led to huge economic losses for the region and been blamed on both negligence and dry weather. Malaysia, Singapore and to a certain extent Thailand and Brunei Darussalam are all regularly affected by it.

Certainly one significant contributor to the problem is the clearing of land for palm oil plantations.

The government offers low-interest loans to plantation companies, in the hope that 1.5 million hectares of new plantations can be added to the country over the next five years. The availability of peatland is attractive for those wanting to clear land for palm oil.

Palm oil can be processed into alternative energy source biofuel, although currently technology only allows it to be used in small amounts mixed with conventional fuel.

Many producers of palm oil, the price of which increased by 35 percent between January and November 2006 after fuel prices rose, have blamed the haze on local villagers, pointing to their traditions of burning land to clear it, combined with the hot weather.

Peatland fires are harder to extinguish than forest blazes. And occasional rainfall does little to diminish to smog.

A study by the Netherlands-based Wetlands International and Delft Hydraulics revealed earlier this year that during the last few decades, emissions from drained or burned peatland in Indonesia have reached 2 billion tons of carbon dioxide a year.

This shows that Indonesia has contributed to almost a 10th of global greenhouse gas emissions from human activities.

The country emits 6.5 times as much CO2 from degraded peatland as it does by burning fossil fuels every year, the report said.

Aside from the increasing role of palm oil producers, bad planning and ineffective forest management has contributed to the months of fires and smog.

Critics say the expansion of palm oil plantation land has been unnecessary, an easy way out rather than an effort to maximize available land.

Indonesian Forum for The Environment executive director Chalid Muhammad said the government had issued too many forest utilization licenses.

"Fifteen million hectares of land in Indonesia are in dispute for various reasons, so they cannot be utilized. That explains why there are so many forest concessions issued," Chalid said.

The government's plan to empower both civilians and officials to monitor the land has proved difficult -- even the governor in charge of one of the world's greatest tropical forest centers has expressed frustration.

"Many officials only care about the investors and neglect the ecological implications. Issuances of forest permits are rarely accompanied by an environmental impact assessment," said Central Kalimantan governor Teras Narang.

"Palm oil is important as an alternative fuel source. However, diversity in plantations is better for Kalimantan. There should be more rubber plants, meranti, jeruntu, and others," he added.

As for handling the annual smog problem, the government has been reactionary rather than take preventive measures.

Efforts to induce rain through cloud stimulation and "water bombing" have been costly and ineffective, particularly given the large scope of the haze and inadequate facilities.

Walhi says there are 40,000 hotspots, areas that have generated heat across Indonesia for the past five years.

Moreover, Indonesia has limited aircraft suitable for tackling the issue, although though it is aiming to buy more. This year the government used two Hercules aircraft from the Air Force. A larger and much more effective water bomber costs about Rp 400 billion (US$44 million).

Law enforcement in the affected areas is notoriously poor, to the disgust of neighbors Malaysia and Singapore.

Some critics have called for stronger legal instruments, such as a presidential decree to enable the instant revocation of forest permits or lawsuits against the company if the people are found guilty, apart from stricter enforcement.

"The Roundtable on Sustainable Palm Oil is also ineffective because the current law cannot revoke a plantation company's permit for land use if it is found guilty," said Chalid.

The Roundtable, grouping palm oil companies, environmentalists and other energy companies, aims to certify companies that adhere to sustainable ecology.

Many of the arrested culprits have been insignificant scapegoats, as the big players easily bribe their way out.

Governor Teras suggested a faster process of examination and gathering of evidence. The current legal process, the governor said, is long, arduous and costly.

Further, monitoring agents such as regents, public figures and kampong heads, had not really become aware of the importance of eradicating the haze, he said.

"Many of the community leaders are authorized to act but lack the will, facilities and funds," Teras said, adding that officials needed a detailed map marking smog-sensitive areas.

Indonesia has not even signed the Transboundary Haze Agreement, which has been ratified by a number of other Southeast Asian countries. This is despite the willingness of the Association of Southeast Asian Nations to allocate $50,000 to solving the problem from each country.

It's rather hard for Indonesians affected by the smog, let alone neighbors, to understand legislators' excuses that before signing, other regional environment problems should be handled -- except if locals and the elite of Java's major cities including Jakarta one day find themselves choking in smoke.

The costs incurred by the haze agreement are still seen to be a burden while, for instance, "Malaysia and Singapore have been accommodating and buying our smuggled logs," legislator and former environment minister Sonny Keraf said.

Neighbors are urging us to ratify the treaty to enable rapid deployment of assistance in event of fires.

Others say even if Indonesia doesn't ratify the agreement, ASEAN is reluctant to impose tough sanctions on Indonesia.

But nature can't wait for everyone to sort out priorities. Next year efforts to douse the smog could be even harder because of the forecast of a longer dry season, triggered by the El Ni¤o weather pattern in the Pacific Ocean.

Psychics consulted in search for plane

Andi Hajramurni, The Jakarta Post, Makassar

Searchers slaughtered a buffalo in a traditional ceremony and consulted psychics Friday, the fourth day after an Adam Air jetliner went missing over Sulawesi.

Meanwhile, thousands of soldiers and police continued a massive search over land and water on the southern part of the island for the missing aircraft.

Bad weather continued to hamper the operation and as of late Friday there were still no signs of the Adam Air Boeing 737-400 or any of its 102 passengers.

"None of our search efforts on land, sea and air have yielded results," said the commander of the Hasanuddin Air Base in Makassar, Commodore Eddy Suyanto, adding the operation would continue Saturday.

Flight KI-574 vanished from radar screens an hour after departing from Surabaya on Monday afternoon for Manado. Reports said the pilot had reported heavy winds just before all contact with the aircraft was lost.

In Jakarta protesters grouped in the Solidarity for Transport Victims group called for the resignation of Transportation Minister Hatta Radjasa. Demonstrating in front of his office, they demanded he be held accountable for other accidents including the sinking of the Senopati Nusantara ferry last Friday off the north coast of Java. At least 400 passengers are still missing from the ferry, but rescuers expressed optimism of finding more survivors after locating another 15 passengers Thursday.

A relative of five people on board the Adam Air flight said Hatta should be put into police custody. "Just arrest him. I don't need compensation, I just want them (the survivors) found," he told Metro TV.

Psychics are also helping the search, with one, a Mama Lauren, saying the aircraft had crashed in Lake Tempe in South Sulawesi's Wajo regency.

In Majene, West Sulawesi, a search and rescue team enlisted the help of local shamans and slaughtered a buffalo in a traditional ceremony, where food offerings were made to the spirits of the jungle and prayers were offered to ancestors to "clear the path" for the operation.

"When we come to a new place we have to greet the spirits here," Majene military chief Zakariya told AFP.

"This is the local custom practiced here for generations to clear the path when we start our search. It is just seeking permission to search this area."

"You can see that even when using very hi-tech devices and enlisting the help of Singapore, we have still not found anything. So this is an alternative measure that we are using," he said.

On Thursday Singaporean Air Force soldiers joined the search, and on Saturday a six-member team from the United States is expected in Sulawesi.

Antara reported the team includes members of the U.S. National Transportation Safety Board, Boeing, the Federal Aviation Administration and a representative from General Electric.

Commodore Eddy said all information from the public was being checked.

Meanwhile, rumors about the fate of the plane spread around the country via mobile phone text messages, with some suggesting the aircraft blew up in mid-air after terrorists detonated a bomb or sabotaged the plane.

A number of the passengers' families were still camping out at Makassar's airport on Friday but others had given up waiting and returned home.

On Saturday, Vice President Jusuf Kalla, who heads the National Disaster Management Coordinating Board, is scheduled to arrive in Sulawesi and observe first-hand the search and rescue operation.

Jakarta activates flood warning system

Adisti Sukma Sawitri, The Jakarta Post, Jakarta

People in Jakarta's flood-prone areas will now get a warning to evacuate their houses up to six hours before floods are expected, the city administration says.

The city's new flood warning system came on line Friday. If floods are likely, officials at flood gates in upstream Bogor, Bekasi and Depok will send text message warnings to 13 subdistrict heads living in areas near 13 rivers in the city.

The subdistrict heads will then inform residents of the danger through loudspeakers at mosques and churches in the areas.

It takes about six hours for floodwaters to flow from Depok to Manggarai, East Jakarta, while water takes nine hours to flow downstream from Bogor, the city flood mitigation team said.

The Public Works Ministry will add data to the system by installing 13 telemeters along the city's main rivers to provide a minute-by-minute stream of water-level information.

The administration has prepared 23 temporary shelters, 442 logistics centers, four helicopters and 206 rubber dinghies to evacuate people if worse flooding occurs.

Thousands of police, soldiers, rescue teams and Indonesian Red Cross volunteers will also be mobilized to assist victims.

Governor Sutiyoso said although the administration could not stop the city from flooding, the city was now better prepared to cope with the eventuality.

"We can minimize losses, although we cannot totally prevent floods before the East Flood Canal project is finished," he said Friday after a ceremony to activate the warning system.

The East Flood Canal, which is being expanded to the eastern outskirts of Jakarta, is expected to stop flooding from Bogor and Depok during the rainy season.

The construction of the canal is moving slower than scheduled because the Jakarta Public Works Agency has yet to clear the land at the northern end of the canal.

Jakarta currently relies on a poor drainage system and water pumps to minimize water spill-over from the many garbage-choked rivers in the city.

City crisis center spokesman Heru Djoko said the administration was planning to build a data center to pool all information for the flood warning system.

The center would provide comprehensive information on floods, he said.

"In the absence of an advanced alert system to anticipate floods, we must rely more on integrated information from our conventional tools of communication like phones, walkie-talkies, radio and television," he said.

The Meteorology and Geophysics Agency is predicting heavy flooding in the city this month.

There have already been floods in the East Jakarta areas of Kampung Melayu and Cawang during Christmas.

The last major floods hit the city in 2002, killing 21 people and displacing as many as 380,000.

Indonesia To Plant More Trees To Quell Flood, Landslide

JAKARTA, Jan 5 (Bernama) -- Indonesia plans to beef up reforestation to prevent a repetition of the recent landslides and floods that have claimed hundreds of lives, Vice President Jusuf Kalla said here Friday.

The world and the government have blamed deforestation and forest destruction as the cause of the frequent landslides and floods in the vast archipelago country.

Illegal logging and land clearing for new plantation have destroyed the forest, Indonesian news agency Antara reports.

Kalla said strategy by planting trees with a number doubling those cut for commercial purpose will be implemented soon in lack-forest covered areas.

"We will plant trees as many as possible. This year we plant two million and cut one million trees," he told a press conference.

Kalla said that currently the number of trees cut were more than those planted.

Over 200 people were killed in floods and landslides in the provinces of North Sumatra and Aceh of Indonesia's Sumatra island in December last year.

The disaster destroyed hundreds of houses and scores of vital infrastructures. More than 200,000 people were internally displaced.

The tropical country has regularly suffered from the disaster.

Heavy torrential rain has often followed by floods and landslides, as the soil, in the lack forest covered areas, can not hold the water.

Indonesian ferry survivors recall fight for life as search extended

The International Herald Tribune (AP), 5 January 2007

SURABAYA, Indonesia: Ahmad Rifai thought he was going to die as huge waves hurled his life raft around the Java Sea following last week's ferry sinking in central Indonesia. But for five days he desperately gripped the boat, too scared to sleep, until he washed ashore.

"I remember those nights when I was adrift in the middle of the dark night with storms, rain, lightning and high waves," said Rifai, a 45-year-old plantation worker, as he recovered Friday in a hospital in the coastal city of Surabaya.

"There was nothing I could do, I could only keep chanting, 'God is great, God is great.'"

Almost 630 people were on board the Senopati Nusantara when it sank before midnight after being pounded by towering waves for several hours on a trip from Borneo to the main island of Java.

More than 230 people, including the captain, have so far been rescued. Just eight corpses have been recovered.

President Susilo Bambang Yudhoyono ordered the search on Friday to continue for the time being, saying survivor stories from the 2004 Indian Ocean tsunami showed that people could stay alive for up to three weeks on rafts in the country's tropical climate.

Survivors have been found on life rafts, clinging to debris or on beaches on remote islands after washing ashore. They have been found farther away from the site of the sinking each day because of ocean currents.

Col. Jan Simamora, head of the search and rescue mission, said ships and planes were scouring the sea near the resort island of Bali, some 700 kilometers (430 miles) west of where the ferry sank.

No survivors have been found, though, since Rifai and 14 others in his tiny raft ran aground Wednesday on an island hundreds of kilometers (miles) away.

Rifai said during his time at sea he saw no rescue teams. The men in the raft spotted land three times, but high waves prevented them from using their hands to paddle the vessel ashore. They survived on rain water before washing ashore.

"We just went where the waves took us," he said.

Indonesia has been wracked in recent weeks by seasonal storms that have triggered deadly landslides, flooding and at least six maritime accidents in different parts of the sprawling archipelago. A jetliner with 102 people on board disappeared in heavy winds and is still missing.

As the ferry sank, Rifai said he saw two adults and two children hugging each other on deck before jumping into the sea, still holding on to each other.

"It seemed they wanted to die together," he said, adding the image stayed with him during his time on the life raft. "Thank God we managed to get in a raft."

Another survivor said thinking about his wife and children gave him strength.

"I tried to remember what they did each day," said Ansari, who goes by a single name. "I could not imagine dying and leaving no one to look after my family."

Indonesia air loss mystery deepens

• Stephen Fitzpatrick, Jakarta correspondent

• January 04, 2007, The Australian

FOUL weather forced search and rescue teams out of the skies yesterday as the mystery deepened over what became of Adam Air Flight KI 574, the budget jet that disappeared between the Indonesian islands of Java and Sulawesi on Monday with 102 people on board.

Equally baffling was how the Boeing 737-400's wreckage was erroneously reported discovered, complete with 12 survivors, by villagers in a mountainous region of West Sulawesi on Tuesday.

Rescue teams dispatched to the area trekked for 10 hours along mud-soaked trails only to find a furious village chief who denied having alerted authorities to the plane crash.

Transport Minister Hatta Radjasa, fending off accusations of incompetence and calls for his resignation, blamed the early incorrect information on the head of Lanud Hasanuddin airport in Makassar, South Sulawesi.

Airport chief Eddy Suyanto was caught on the hop delivering the latest crash position updates to national search and rescue co-ordinators, and inadvertently let slip the location when quizzed by reporters, Mr Radjasa said.

However, no one was prepared to explain why the information was not checked in the first place, with the effective loss of at least a full day's search time. The search was widened to include the Makassar strait on the assumption pilot Refri Agustian Widodo might have sought a safe route around a dangerously large cumulonimbus cloud mass and 40-knot wind gusts.

Mr Suyanto said nothing had been found and military search aircraft had been grounded as monsoonal storms worsened.

An irritated President Susilo Bambang Yudhoyono summoned the key players to a crisis meeting in Jakarta last night, including Mr Radjasa, who was forced to return from his damage-control holding position in Makassar.

"The Government has lied to the people. Hatta must be investigated," said Rendry Lamajidu, a senior member of the national parliamentary committee on transportation.

As well as the time wasted trekking to the wrong location, the long delay in launching a search for the jet when it first disappeared from radar screens shortly after 3pm local time (6pm AEST) on Monday was a crucial failure, Mr Lamajidu said.

"There were no direct efforts in the first 24 hours, when there could still have been passengers to save. Now it's not possible there's anyone left," he said.

Upper house Speaker Hidayat Nurwahid conceded human error was probably responsible for a string of transport disasters in recent days, including the capsize of a ferry north of Java with the loss of hundreds of lives, but cautioned against laying all the blame on the minister.

"It's not entirely his fault," Mr Nurwahid said, as he called for a thorough investigation into the transport sector. Deregulation of the Indonesian airline industry in 1999 produced a host of low-cost, low-quality carriers, notorious for their poor service and safety and more akin to long-haul bus travel than normal airlines.

But aeronautics professor Djoko Sardjadi of the Bandung Institute of Technology said the excessive age of most of Indonesia's fleet of Boeing 737s - many between 20 and 25 years old - should not be a problem "so long as we understand that the planes are old and they are not forced beyond their operating limits".

Another ship sinks in East Nusa Tenggara's waters

KUPANG, East Nusa Tenggara (Antara) : Another ship has sank as it was hit by high waves in the waters of East Nusa Tenggara province, killing one of its four crew members.

The Sius Tokan cargo ship sank Tuesday, but a search and rescue team could locate it only Wednesday, said Sentianus Medi, an official responsible for disaster in East Nusa Tenggaraprovince Wednesday.

"Search and rescue team saved three crew members and found the body of a dead crew member," he was quoted by Antara news agency as saying.

Two of the three crew members are ship captain A. Rochim and his assistant Fadli Tepen, but Anton Kellen, was killed during the incident in an area close to Tanjung Boang in Semua Island, Kupang regency.

A fishing boat also went on missing in the waters last Saturday, killing one of the fisherman.

Bad weather was blamed over several other ship accidents, including the Senopati Nusantara, which sank after being pounded by heavy waves for more than 10 hours as it neared the end of a two-day journey from Kalimantan Island to Central Java.

The ferry, which was built in Japan in 1992, had a capacity of 850 people. Officials say bad weather was the cause of the accident.

Expert pessimistic rescuers to locate missing plane

JAKARTA (Antara): Multi-media expert Roy Surya expressed his pessimism that search and rescue team would be able to find the location of an ill-fated plane, which has gone missing since Monday evening.

The plane went missing on its way from East Java provincial capital of Surabaya to North Sulawesi provincial capital of Manado.

He said the signals of emergency locator transmitters (ELTs), which could guide rescuers to locate the plane wreckage would have disappeared at 3 p.m. Wednesday.

He added lifetime of ELT battery is only 48 hours.

"If ELT signal disappeared, the searching of the wreckage will be more difficult because it only depends only on manual-visual method," Roy was quoted by Antara news agency as saying Wednesday.

According to Roy, there are two ELTs -- portable and fixed -- in every plane, which are placed in cockpit and in the tail of the plane.

Meanwhile, rescuers expanded their search for a missing jetliner to the sea Wednesday, one day after senior Indonesian officials erroneously said the Boeing 737's charred wreckage had been found along with a dozen survivors.

Rescue teams spent more than 10 hours Tuesday hiking through slippery forest paths in a mountainous region of Sulawesi's western coast but found nothing, prompting authorities to expand their search Wednesday to include the sea, Bambang Karnoyudho,the head of the National Search and Rescue Agency, told The Associated Press.

Three navy ships set sail soon after sunrise in the Makkasar Strait and five Air Force planes took to the skies, he said, searching for signs of wreckage in the water and in a large section of south and western Sulawesi.

On Tuesday, top Indonesian aviation, military and police officials - and the airline itself - said the plane had been found in a remote part of Sulawesi. They said that 90 people on board had perished, but that the remaining 12 may have survived.

Descriptions were vivid, with officials saying corpses and debris from the plane were scattered over a 300-meter (327-yard) area of forest and jagged cliffs - highlighting the often unreliable and chaotic nature of disaster relief efforts in theworld's largest archipelagic nation.

But later in the day, they said they had been wrong and no wreckage had been found.

Cocoa Production Drops

Wednesday, 03 January, 2007 | 17:21 WIB

TEMPO Interactive, Jakarta: The long dry season during 2006 resulted in cocoa production continuing to go down.

In the last two months, production decreased to 10,000 tons, despite cocoa farmers being capable of producing export of around 50,000 tons per month on average.

“If production goes down, the impact is not only on exports, but also on farmers,” said Zulhefi Sikumbang, Head of the Indonesian Cocoa Association, in Jakarta, yesterday (2/1).

According to him, farmers certainly were not be able to benefit from the world's high cocoa price, US$1,792 per ton, up until March last year.

This price rose compared to October 2006, when it was around US$1,400.

“Cocoa prices reached their highest level in the last 16 months.” Zulhefi said, adding that the drop in cocoa exports would continue until February.

Crashed AdamAir plane has yet to be found

MAKASSAR, South Sulawesi (Antara): Hasanuddin Air Force Base chief Cmdr. Eddy Suyanto declared Tuesday that AdamAir Boeing 737-400 that went missing Monday has yet to be found.

"Earlier reports saying that the ill-fated airplane was already found with 90 victims and 12 survivors are not true," Eddy -- flanked by Transportation Minister Hatta Radjasa -- told the media.

"Reports about the wreckage and victims found around Rangoan village in Polewali Mandar, West Sulawesi came from local villagers," he said.

The reports were then verified by sending a SAR team including a number of high ranking officials including South Sulawesi Police chief Insp. Gen. Aryanto Boediharjo and West Sulawesi Governor Anwar Adnan Saleh.

Also being deployed were 745 soldiers and police officers to the believed crash site.

The SAR team, however, did not find the wreckage and victims. They have been ordered to return and to search in other area of Rantepao in Tana Toraja, South Sulawesi.

Eddy suspected the false information was being circulated by certain irresponsible parties.

Both Eddy and Hatta also requested the media to confirm all information through the Air Force Base commander as SAR mission coordinator.

Eddy said an Air Force Boeing 737-200 Surveillerreconnaissance plane would be dispatched Wednesday morning to comb Rantepao area.

The airplane combed Majene and Polewali Mandar areas for three and a half hours but did not find any signs of the ill-fated plane.

Search workers also deploy two helicopters from the National SAR Agency and police, three NC-212 Aviocars and three Nomads patrol airplanes from the Indonesian Navy.

Lion Air skids at Ambon airport

AMBON, Maluku (Antara): A Lion Air MD 90 aircraft skidded Tuesday at the runway of Pattimura Airport in Ambon at 8:14 a.m. local time (6:14 a.m. Jakarta time) but there was no damage or fatalities.

A Lion Air executive, however said the plane did not skid and merely missed the turning point.

The airplane -- plying the Jakarta-Surabaya-Makassar-Ambon route -- was carrying 110 adult and five children passengers approached from west of the runway eastward. It slipped some eight meters from the runway edge. Passengers were reportedly to scream hysterically.

The airplane was then towed to the apron. The pilot in command was Capt. Imbuh Sasmita with Saiful as first officer. There were also four flight attendants aboard the flight JT 790.

Bad weather was believed to be the cause of the incident because it was raining hard with strong wind when the airplane landed.

Separately in Jakarta, Lion Air spokesman Hasyim Arzal Al Habsyi said the airplane only missed the turning point and did not skid.

"It is common if an airplane misses the turning point and we cannot call it an incident. The media should be more careful about using these technical terms," he said.

Hasyim said the plane missed the turning point because of heavy rain and strong wind with a speed of 10 knots.

Officials: Indonesian Jet Crash Kills 90

U.S. Embassy Says 3 Americans Aboard Plane

POSTED: 3:35 am EST January 2, 2007, The Associated Press.

MAKASSAR, Indonesia -- Rescuers found the smoldering wreckage Tuesday of an Indonesian jetliner that went missing during a storm, and officials said 90 people were killed but 12 survived in the country's second major disaster in days.

Monday's crash followed the sinking of a passenger ferry late Friday in Indonesia's Java Sea that left 400 people dead or missing.

The Boeing 737 operated by local carrier Adam Air crashed in a mountainous region of Sulawesi island in the northeast of the sprawling archipelagic nation, said local police Chief Col. Genot Hariyanto.

The 17-year-old plane carried six crew and 96 passengers, including 11 children. The U.S. Embassy in Jakarta said three Americans were aboard, but there was no immediate word on whether they survived or on their identities.

Adam Air spokesman Hartonom, who goes by just one name, said 90 people were killed and that there were 12 survivors.

Officials said rescuers were trying to evacuate survivors, but there was no immediate word on their conditions.

"The plane is destroyed and many bodies are around there," Hariyanto said.

The plane was on a domestic flight from Java island to Sulawesi when it disappeared late Monday about an hour before it was due to land amid very bad weather. The captain managed to send out two distress signals, said national aviation chief Ichsan Tatang said late Monday.

Hundreds of people gathered at Manado airport, the aircraft's destination.

Some collapsed when they heard the news 90 people had died, while others angrily banged on the door of the Adam Air office there, demanding information, witnesses said.

"I have heard on the television that 12 people survived, I just hope that one of them is my father," said Ridwan Lamani.

Justin Tumurang's twin sister was on the plane. "Being a twin, we share almost every feeling. I felt something was not right, and it grew worse. Now I feel pain," she said.

Weeks of seasonal rains and high winds in Indonesia have caused several deadly floods, landslides and maritime accidents, including the sinking of the ferry.

The passenger ship capsized about 650 miles from the area where the Adam Air plane disappeared, and naval ships and helicopters have since scoured the choppy tropical waters for ferry survivors.

However, officials said bad weather on Tuesday was preventing rescuers from resuming the search.

Loved ones also gathered in the Central Java port town of Rembang, awaiting word about the ferry, many losing hope as bloated bodies continued to wash to shore.

Search and rescue operations were continuing, with nearly 200 survivors found, but a temporary morgue also was being set up at a port close to where the Senopati Nusantara went down. Hundreds of body bags were being readied.

"I am tired of crying," said Sipan, who goes by only one name, as he waited at the local hospital for news of his son. "Dead or alive, I will accept his destiny. It is up to God. All I can do is keep waiting."

With more than 17,000 islands, boats are one of the main modes of transportation in Indonesia. But people are increasingly taking to the skies, thanks in part to the emergence of budget airlines.

Adam Air is one of at least a dozen budget airlines that have emerged in Indonesia since 1999, when the industry was deregulated.

The rapid expansion has led to cheap flights to scores of destinations around the sprawling nation, but has raised some safety concerns, since many of the airlines are small and lease planes that are decades old.

The aircraft's last inspection was on Dec. 25 and it had flown 45,371 hours, Tatang said.

Last year, an Adam Air jetliners lost all communication and navigation systems for four hours during a flight between the Indonesian capital Jakarta and Makassar on Sulawesi Island, forcing the pilot to make an emergency landing at a small provincial airport.

A day later, the plane flew to a regional airport with proper maintenance facilities without being given the go-ahead by aviation authorities, a major violation of national and international safety rules.

In September 2005, a Mandala Airlines Boeing 737 crashed after take off on Sumatra island, killing 143 people.

In September 1997, a Garuda Airlines Airbus crashed into a jungle-covered mountain slope in Sumatra, killing all 234 people aboard. Two months later, a Silk Air Boeing 737 jet crashed into a river on Sumatra, killing 104 people.

Adam Air, which began operations in 2003, was founded by Agung Laksono, the speaker of Indonesia's house of representatives and the company's chairman.

Contact lost with Indonesian jet

BBC, 1 January 2007

Contact has been lost with a passenger plane flying between the Indonesian islands of Java and Sulawesi, aviation officials have said.

The Boeing 737-400 has 96 passengers and six crew on board.

The Adam Air plane reportedly left Surabaya in Java at 1300 local time (0600 GMT) on a two-hour flight to Manado in northern Sulawesi.

Transport Minister Hatta Radjasa said it had sent out a distress signal and rescue teams had been sent to find it.

It was believed to be near Mamuju, in southern Sulawesi, 750km southwest of its destination, but may have come down in the sea.

Severe storms

It was not clear why contact was lost, and there was no information as yet on the condition of the plane or its passengers, Mr Radjasa said.

Contact was lost at 35,000ft, when the plane was an hour away from its destination, a ministry official added.

An air traffic controller told local TV the aircraft had hit "very bad" weather and would have run out of fuel if it had not already landed.

The area has been subjected to high winds and severe storms in the last few days. About 400 people are still missing after a passenger ship sank off Java on Saturday morning.

The BBC's Lucy Williamson in Jakarta says Indonesia has a chequered flight safety record including several major crashes.

Last year near 150 people were killed when a plane crashed into a busy road shortly after taking off from Medan on the island of Sumatra.

Adam Air, a privately owned low-cost airline based in Jakarta, began operations in 2003.

All rescued after ferry sinks near Bali

Jakarta (ANTARA News) - Indonesian search and rescue teams have found all 11 passengers and crew from a ferry which sank off the resort island of Bali, reports said Monday.

Nine were rescued by a passing cargo ship on Monday after they were found floating in their lifejackets in the Java sea, AFP reported citing ElShinta radio.

Two others had managed to make it to Pantai Bukti beach on the northeast of Bali on Sunday.

All 11 survivors, including six crew, were being treated at a hospital in Gresik, in East Java.

The "Sinar Baru" was en route to Lombok from the Javanese port of Surabaya when it sank after strong currents and huge waves hit the vessel.

"Sea water had flooded the motor of the Sinar Baru and water started entering the ship. At the time the chief mechanic was asleep," a local government official told ElShinta.

"The ship was already near the port but it started to sway violently and sank just before reaching it," the official said.

It was the third Indonesian ferry to sink in less than a week.

A ferry with some 600 people sank late Friday in a storm off Java while a ferry carrying 100 people from Sumatra island to Bangka island capsized late Thursday, killing at least three people.

Nine Persons Missing In Ferry Accident In Indonesia

December 31, 2006 8:00 a.m. EST

Komfie Manalo - All Headline News Correspondent

Jakarta, Indonesia (AHN) - At least nine persons were reported missing when a passenger ferry with 11 people on board disappeared on Sunday off the Indonesian resort island of Bali, authorities said.

Reports from the state's official Antara news agency said that two passengers of the missing "Sinar Baru" had managed to make it to Pentai Buktu beach, some 69 miles northeast of Bali's capital Densapar. The boat was en route to Lombok from Surabaya when it disappeared.

Ketut Parwa, an official from Bali said the boat was reported missing at 3:30 am (local time) on Sunday.

He said search and rescue teams have been dispatched in the area to look for any survivors and to search for the missing boat.

Parwa said, We have yet to receive information from the two people who survived the ordeal as they are still in shock."

The latest missing boat is the third in the past few days. On Friday night, a passenger ferry carrying over 600 passengers sank off Java after encountering a storm. Another ferry with 100 people on board and en route to Bangka island from Sumatra island, capsized Thursday, killing at least three people.