Business & Economy

Indonesia, Malaysia agree to fight ‘discrimination’ against palm oil

Jakarta, Jan 9 (EFE).- Indonesia and Malaysia, the world’s largest producers of palm oil, agreed on Monday to fight “discrimination” against its sale and production.

The manufacture of palm oil, which is used in a wide range of food and cosmetic products, has been attributed by environmental groups to high levels of deforestation.

The EU has moved to ban palm oil products from the European market that are not sustainably sourced or manufactured.

Indonesian president Joko Widodo, who is known as Jokowi, said after a meeting with his Malaysian counterpart, prime minister Anwar Ibrahim, that the two countries “will fight the discrimination against palm oil,” according to a statement released by the presidential office.

“We have agreed to strengthen cooperation through the Council of Palm Oil Producing Countries (CPOPC) to increase the palm oil market,” the statement added.

Indonesia, which accounts for up to 60% of global palm oil production, with India, China, the EU and Pakistan as its main buyers, in May lifted a ban on exports of the oil that had been in place to boost the flagging domestic market.

The ban on palm oil exports had fueled soaring global food prices amid an international inflation spike triggered by the ongoing war in Ukraine.

Jokowi said he was lifting the export ban in response to enhanced supply and higher domestic prices.

Indonesia produced more than 46 million tons of palm oil in 2022, of which it exported 74%, while Malaysia, the second largest producer in the world, reached 24.2 million tons and exported 64%.

Widodo and Anwar’s comments come after the European Council and European Parliament reached a provisional agreement in December to prevent the sale of commodities linked to deforestation on the European market.

The new law will force companies to produce evidence that their supply chains do not contribute to deforestation, or face hefty fines.

On the list of commodities targeted by the new EU law are palm oil, soybeans, coffee, cocoa, timber, rubber and beef.

In Anwar’s first trip abroad since winning elections in November, the leaders also signed eight agreements across various sectors like green energy, exports and naval policy. EFE


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