The oil will become the first shipment to be sent back to Indonesia since about 85,000 tonnes of diesel-tainted oil was found to have been shipped to Rotterdam last year in a scandal that embarrassed the world's second largest producer.

Officials said on Friday that the shipment would be sent to Belawan Port in February, prompting traders to voice hopes that Indonesia could now begin to regain the confidence of buyers.

Indonesia had said the contamination did not pose a health risk - a position supported by Dutch authorities - but agreed to take back the oil after buyers faced consumer pressure to reject it, Indonesian traders said.

``At least 21,000 tonnes of tainted CPO will arrive in Belawan on February 12,'' Belawan's administrator, Barzuweh told Reuters from the Port near Medan, the provincial capital of North Sumatra,1,425 (885 miles) northwest of Jakarta.

But some traders said they feared offshore buyers would remain wary until Indonesian authorities satisfied them that the returned palm oil would not resurface in future shipments.

The discovery of contaminated oil prompted European buyers to shun Indonesia, the biggest palm oil producer after Malaysia.

The European Union had been taking 25 per cent of Indonesia's crude palm oil exports. The rest is exported to countries such as China, India, Pakistan, the United States and to the Middle East.

Barzuweh said the returned oil would be pumped into tanks operated by the state-run PT Deli Tama Indonesia (DTI) in Belawan, the country's main exit for crude palm oil.

``According to DTI officials, the oil will be kept there for a while before being returned to its owners,'' he said, adding the rest of the tainted oil would be returned within three months.

Barzuweh said the oil would be free of contamination once it was refined into by-products.

But some traders weresceptical.

``You may refine the tainted CPO, but still the by-products come from a tainted source. My buyers have the technology to trace contamination... I don't want to be sued,'' said a Medan trader.

``The main problem is we don't know what the government plan to do with the oil.''

The Bisnis Indonesian newspaper reported on Friday that the tainted crude palm oil needed certification from a surveyor before being released to customers.

It quoted head of international trade at the North Sumatra office of the trade and industry ministry, Azwar Aziz as saying the oil needed to be declared contamination-free before it could be refined and sold.

Dutch authorities say the contamination posed no health hazard because only a tiny amount of diesel could have entered the food chain, but this did not satisfy European buyers.

Crude palm oil is refined into olein which is used as cooking oil and also finds its way into soap and margarine.

Jakarta said the contaminated oil came from Deli Tama's tanks andwas investigating how it happened.

``The oil will be temporarily kept at Deli Tama's tanks. But we have to wait for further discussions whether it will be refined or sold to the local market,'' said a Deli Tama official in Medan.

``What I know is the diesel will evaporate when the CPO is refined.''

-- (Reuters)