Officials at the Belawan Port in Medan, North Sumatra, the main exit for the export of crude palm ol (CPO), said export activity had slowed.

"Export activity has slowed down a bit, I think because business does not run smoothly lately," said the official. He gave no further details.

Traders in Medan, the key commodity trading city of two million, said olein -- the refined form of CPO which is used as cooking oil -- was unquoted there. "Olein is unquoted in Medan. Traders have fled for Singapore because of the growing fears regarding the political situation," one trader said in Medan.

Many traders are ethnic Chinese who were the target of the recent riots in the city of two million.

Trading was also paralysed in Jakarta, hit by riots last week in which ethnic Chinese businesses and homes were again prime targets of looters and arsonists.

"Theoffice is still closed. There is no trading and traders were told to come to the office on next Monday," said an official at a palm oil trading company.

More than 500 people were killed and thousands of shops, homes and offices destroyed in last week's Jakarta mayhem.

The riots were triggered by the death of six students a week ago during an anti-government protest at Trisakti University in West Jakarta.

Olein was quoted in Medan at 3,400 rupiah/kg on Monday.

The rupiah sank to 13,500/14,500 against the dollar in the morning as uncertainty continued over whether president Suharto would bow to a call by parliament speaker Harmoko to step down.

Suharto was expected to appear live on TV on today morning to explain the political situation.

Indonesian palace sources said Suharto would answer a call for him to resign by Harmoko, speaker of Indonesia's parliament, who also heads the ruling Golkar Party.

On Monday, Indonesian armed forces commander General Wiranto dismissed the call, setting stage forconfrontation between civilians and the military.

"The Indonesian situation seems to have reached an important point," said Tokyo Securities general manager Kunihiro Hatae, adding he would watch to see if the turmoil has a negative impact on the business of Japanese banks and other firms. Meanwhile, Bank credit-rating agency Thomson BankWatch said that it had cut its sovereign risk rating for Indonesia to Single-C from B-minus.

The downgrade was "based on the risks posed by the escalating violence, the political paralysis that is likely to grip the country even if Suharto steps down soon, and the new round of uncertainty surrounding the fate of both the IMF reforms and debt-restructuring plans," BankWatch said in a statement.

Indonesia has postponed planned public transport fare increases, the official Antara news agency said.

The move follows Friday's decision to partially roll backfuel price rises which had been put into effect on May 4.

The eventual removal of fuel subsidies had been agreedwiththe International Monetary Fund, which has coordinated a $40 billion rescue package for Indonesia's economy.

But the resulting higher fuel and transport prices were deeply unpopular and sparked rioting earlier this month. Antara said train, taxi, ferry and bus fares would all be cut. Non-economy train fares would be lowered 20 per cent and medium city bus fares cut to 500 rupiah (three cents) from 600. Ferry boat fares were to be lowered 20 per cent. It said the decision was made after a 12-hour meeting of government officials and public transport associations on Monday.