Lilian Karunungan – - Coal and palm oil exporters' profit margins may narrow should the rupiah rise another 4 percent to 9,000 per dollar, and the costs of fuel and rice keep climbing, industry groups said.

Seven of 17 analysts in a Bloomberg News survey predict more gains in the currency, Asia's best performer this year, to 9,000 or stronger against the dollar by the end of 2010. The median estimate is 9,200, compared with 9,398 on Wednesday. Indonesia is the world's biggest producer of palm oil and the largest exporter of power-station coal.

The currency rising to 9,000 "is a critical level," Bob Kamandanu, chairman of the Indonesian Coal Producers Association (APBI), said in an interview in Jakarta on Friday. "It's too strong."

The country's exports, which account for 24 percent of gross domestic product, fell 19.9 percent in September from a year earlier after dropping 15.4 percent the previous month, government data showed on Nov. 2.

The rupiah has risen 15 percent this year, nearly double the pace of the South Korean won. On Oct. 15 it hit 9,280, its strongest level since September 2008, and last traded at 9,000 in July 2007.

Overseas investors poured funds into domestic stocks and bonds this year to benefit from the fastest growth in Southeast Asia, driven by domestic consumption. The Jakarta Composite Index has soared 82 percent as funds based abroad purchased $951 million more local shares than they sold, according to stock exchange data.

A rate of "9,000 would be dangerous for our exporters," Fadhil Hasan, executive director of the Indonesian Palm Oil Producers Association (Gapki), said. "It's going to hurt them."

Coal producers' earnings are also being hit by increased fuel prices, which account for 30 percent of costs, Bob said.

Oil on the New York Mercantile Exchange has risen 70 percent this year and traded at $76.47 per barrel on Wednesday trading in Asia. An oil price above $80 "would kill our operations," Bob said.

Gapki's 378 growers and producers also have to grapple with rising prices of food to feed their workers, said Steaven Halim, second secretary at the association.

The wholesale price of rice was at Rp 5,550 per kilo on Wednesday, up from Rp 5,400 a year ago, according to PT Food Station Tjipinang Jaya, the country's biggest market for the grain.

Rice production may be affected by dry weather caused by El Nino, which warms the Pacific Ocean, which can prolong the dry season in parts of Asia.

If the rupiah rises to 9,000, "that may be a problem at the farms," Steaven said. "In nominal terms, the farmers will have decreasing income, while they are paying more for the staple food."