JAKARTA, Oct 3 — Indonesia and Malaysia plan to set up an intergovernmental organisation of palm oil producers to ensure further industry cooperation between the world’s top producers and prop up prices, ministers from both countries said.
The organisation, which is going to be called Council of Palm Oil Producer Countries, will coordinate palm oil production, manage stocks and stabilise palm prices, Indonesia’s Coordinating Minister for Maritime Affairs Rizal Ramli said in a news conference with Malaysian officials today.
Malaysian palm oil futures fell to RM2,387 (US$541.27) a tonne on yesterday’s closing after hitting a 15-month high earlier in the week. The benchmark price was far below its peak of RM3,967 (US$899.55) in 2011 during the commodity boom.
“If we are on our own, there will be unnecessary competition. But if we’re together, we’ll control 85 per cent of the palm oil market,” Ramli said, adding he will invite another southeast Asian palm producer Thailand to join the council.
Malaysia’s minister of plantation industries and commodities, Datuk Douglas Unggah, said the new council would promote sustainable practices in palm oil industry.
Ramli led an Indonesian delegation to visit Malaysia at the end of August to discuss about the plan, during which an agreement for further cooperation was reached.
The two governments plan to establish the council after Indonesian President Joko Widodo meets his counterpart Malaysian Prime Minister Datuk Seri Najib Razak, Ramli said.
Previous attempts to develop better palm relations between the two countries have had limited success. — Reuters
