KUALA LUMPUR: Malaysia and Indonesia - the world's largest palm oil-producing nations, should and work together to counter the European Union's (EU) discriminatory trade policies.
Indonesian President Joko Widodo said Malaysia and Indonesia would become the world's largest crude palm oil (CPO) and palm oil producers by working together, making market penetration and pricing management easier.
Speaking to Media Prima ahead of the Asean Summit in Jakarta this month, Jokowi said that without strong cooperation, both countries would face difficulties in managing the EU's discriminatory practices.
"Let's not see Indonesia and Malaysia compete with each other, we will both lose in the end. We need to stand united.
"I am confident that we can face and resolve this if we stand together," he said.
He said Indonesia, which is the Asean chair this year, would continue to champion efforts to convince the EU that their practices conform to their rigorous new regulations on deforestation.
"A total of 16 million people in Indonesia work in the oil palm industry.
"Indonesia will continue to champion this, we don't want to see any discriminatory practices," he said.
Last December, the EU agreed on a new law that requires companies to ensure that commodities sold in the EU do not come from deforested land.
Commodities such as wood, rubber, beef, leather, cocoa, coffee, palm oil and soy would not make it to the EU market unless proven to be "deforestation-free".
Indonesia and Malaysia — which account for about 80 per cent of the world's palm oil producers — have launched separate cases with the World Trade Organisation, saying the measure is discriminatory and constitutes a trade barrier.
The palm oil producers say they have taken steps to meet EU requirements, including stepping up their national sustainable palm oil certification standards and improving environmental protection and food safety standards, but that the bloc keeps imposing new restrictions.
Data from the Malaysian Palm Oil Board showed that in 2022, Malaysia exported 15.72 million metric tonnes (MT) of palm oil for a total revenue of RM135 billion.
India, China, China, Turkiye, Netherlands, Kenya, Philippines, Pakistan, Japan, Saudi Arabia and Iran are Malaysia's main importers, accumulating a total of 9,809,271MT of palm oil products, which constituted 62.4 per cent of the country's palm oil exports.
EU countries in total imported only 1,329,352MT of the country's palm oil exports.
Deputy Prime Minister and Plantations Minister Fadillah Yusof, after meeting with Indonesia Coordinating Economic Affairs Minister, Airlangga Hartarto in Jakarta earlier this year, said the two countries have agreed to send a joint mission to present scientific facts, economic benefits and industry best practices to the EU.
Prime Minister Datuk Seri Anwar Ibrahim, following his meeting with Jokowi, said both countries have agreed to strengthen cooperation through the Council of Palm Oil Producing Countries to increase the market for palm oil and fight discrimination.