Palm Oil Council not to Control Price, Malaysia Says

TEMPO.CO, Jakarta - Indonesian President Joko "Jokowi" Widodo and Malaysian Prime Minister Najib Razak had met on Sunday, October 11, 2015, to discuss the plan to form the Council of Palm Oil Producing Countries (CPOC). Despite being formed by two of the largest oil palm producers in the world, the Council was not aimed at controlling oil palm supply and prices.

"CPOC is not formed to increase [oil palm] prices, because it's not easy to compete against a market. It could work for a day, but not for a long time," Malaysian International Trade and Industry Minister Dato Sri Mustapa Mohamed said in an interview on Tuesday, October 13, 2015 in Jakarta.

Mustapa explained that the CPOC will be formed to provide benefits for both countries, particularly in the plantation sector. Despite not being aimed at controlling prices, Mustapa hoped that the palm oil prices must be set at a reasonable level.

Mustapa added that the two countries must have an aligned understanding in terms of regulations on palm oil utilization for biodiesel. Indonesia earlier had enforced biodiesel B15, which would be increased to B20. Meanwhile, Malaysia had just enforced biodiesel B5 and would increase it to B7.

"Malaysia had not planned to enforce B15 yet. We had just started with B5, and now B7. This must be followed up by the two governments," Mustapa said.

AMIRULLAH