JAKARTA: Malaysia and Indonesia have formally agreed to spearhead the setting up of the Council of Palm Oil Producing Countries (CPOP), to strengthen industry cooperation between the world's top producers.
Prime Minister Datuk Seri Najib Razak said the council would allow Malaysia and Indonesia to cooperate closely as industry leaders, with both countries responsible for 85 per cent of the world's palm oil production.
The council, he said, would also set global standards and allow the two countries to cooperate on determining the volume of palm oil stockpiles.
"This cooperation will bring many benefits, especially to smallholders, and the industry as a whole," he told reporters after meeting with Indonesian president Joko Widodo here to formalise CPOP's establishment.
Najib said the setting up of the council was historically significant as plans to establish a permanent structure for the industry had been underway since a verbal agreement was first reached in 2006.
"This plan has been mentioned many times, but we haven't been able to carry it out until now. So today is a meaningful beginning for the future of the palm oil industry," he said.
He said the council would be headquartered in Jakarta, with Indonesia represented by its former coordinating minister for economic affairs Rizal Ramli and Plantation Industries and Commodities Minister Datuk Douglas Uggah Embas.
Najib said the two countries had also agreed to establish a green economic zone to develop the downstream palm oil sector, with the zone to be determined by Indonesia.
The arrangement, he said, would also allow the countries to work together against the threat to the industry posed by the international anti-palm oil lobby.