KUALA LUMPUR (March 7): Malaysia will produce about 900,000 tonnes of biodiesel in 2017, up about 80% from half a million tonnes last year, while Indonesian output will rise to 3.5 million tonnes this year, from 3 million tonnes in 2016, an industry expert said on Tuesday.

"These are the forecasts based on the current pricing of crude palm oil and oil prices," said U.R. Unnithan, president of the Malaysian Biodiesel Association on the sidelines of a palm oil industry conference in Kuala Lumpur.

Benchmark palm oil prices are up nearly 3% so far this month, after sliding 8.5% on expectations of rising output and weakening demand in February.

Palm oil is down 1.5% at 2,851 ringgit (US$640.94) per tonne on Tuesday evening.

Palm oil can be used to produce the bio components of biodiesel grades sold at retail fuel pumps. Low crude oil prices, though — benchmark crudes are still around half of what they were in mid-2014 — are expected to make it tougher for biodiesel to compete against petroleum diesel.

(US$1 = 4.4450 ringgit)