MUMBAI (Commoditiescontrol) - Indonesia and Malaysia, the world's largest palm oil producers, signed an agreement Saturday, which will have major palm oil producing countries as its members, in an effort to ensure price stability.
The council will be a body similar to that of OPEC for oil producers said Rizal Ramli, Indonesian Resources Minister.
Indonesian Resources Minister Rizal Ramli said the council will be a "game changer" for an industry under pressure from falling prices and unsustainable farming practices.
The two countries account for 85 percent of the world's palm oil production, and the plunge in prices have hurt their economies.
Rizal said the council will address impediments to trade to boost competitiveness in the world market, and promote green and sustainable farming. It will also aim to improve the livelihoods of more than 4 million oil palm smallholders in Indonesia and some 500,000 in Malaysia, he said.
Meanwhile, Malaysian Plantation, Industries and Commodities Minister Amar Douglas Unggah Embas said the council will not try to fix the price of palm oil, but will seek to ensure a sustainable price by organizing and harmonizing stock management.
He said membership will be extended to other producers such as Brazil, Colombia, Thailand, Ghana, Liberia, Nigeria, Papua New Guinea, the Philippines and Uganda.
The two countries will each contribute $5 million to the council's operations and operational details are still being ironed out, officials said.
(By Commoditiescontrol Bureau; +91-22-40015533)
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