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 25 Apr 2009

Indonesia, Malaysia urged to form palm oil cartel

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Indonesian and Malaysian businesses need to establish a crude palm oil (CPO) cartel in order to control the price of CPO export price, Indonesian state news agency Antara quoted an Indonesian Chamber of Commerce and Industry (Kadin) executive as saying.

"We need to form a cartel so that we could control the price of CPO in the world market. Thus buyers from Europe and the United States would not be able to dictate the price to us," Halim Kalla, chairman of Kadin's said during a meeting with CPO businessmen from the Malaysian state of Selangor Thursday.

As the biggest CPO producers in the world, Indonesia and Malaysia should be able to decide the price of their own CPO exports, he said.

"Indonesia and Malaysia are the biggest CPO producers in the world and their policies with regard to CPO always become the focus of the world attention," he said.

Halim said that the policies taken by the two countries on the use of CPO as bio-diesel fuel should have been able to stabilize CPO stocks and price in the world market.

The Kadin official said that cooperation in controlling CPO export price would benefit Indonesia and Malaysia. So far, Indonesia and Malaysia have been maintaining a close relation.

The trade volume between the two countries continued to increase in the past two years with $15.3 billion in 2008 and $ 11.5 billion in the previous year.

Malaysia's investment in Indonesia in 2008 amounted to $363.3 million, which increased from $217.3 million in 2007.

"About 60 percent of the investment value was invested in oil palm plantation in Indonesia," Halim said.

Currently, Malaysian Prime Minister Najib Razak is on his first official visit to Indonesia for two days from April 22-23, 2009. He met with Indonesian President Soesilo Bambang Yudhoyono.

The president during meeting that in economic sector, the trade volume between the two countries continued to increase in the past two years.

Yudhoyono said Indonesia and Malaysia as the world's largest palm-oil producing countries would also cooperate in oil palm plantation sector.


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