Nine or ten crude palm oil (CPO) producers want to join the Council of Palm Oil Producer Countries (CPOPC), the intergovernmental palm oil council set up by the world's two largest CPO producers and exporters: Indonesia and Malaysia. These two initiators signed an agreement in November 2015 for the establishment of the CPOPC - headquartered in Jakarta - that aims to control the global CPO supply, stabilize palm oil prices, promote sustainable practices in the palm oil industry, and enhance the welfare of oil palm smallholders; more or less the role that OPEC has in the crude oil industry.
Currently both initiators - Indonesia and Malaysia - are the CPOPC's only members as both nations are still finalizing the criteria that need to be met by other countries in order to be eligible to join the organization. Arief Havas Oegrosono, Indonesia's Deputy Coordinating Minister of Maritime Affairs and Resources, said nine or ten countries have already (informally) expressed their interest to join the CPOPC. Oegrosono declined to name these countries because negotiations are still ongoing. However, he did inform that it involves palm oil producing countries from Asia, the Pacific, Africa and Latin America.
Although the exact criteria (to join the CPOPC) are yet to be formulated, it will most likely involve matters such as a minimum palm oil plantation size, minimum production and export figures as well as standards for sustainable palm oil. Regarding sustainable palm oil practices, Indonesia and Malaysia still apply different standards and therefore negotiations between both countries require some time. Whereas Indonesia adopted its mandatory Indonesian Sustainable Palm Oil (ISPO) system, Malaysia has its own mandatory rules. Meanwhile, there is also the voluntary Roundtable on Sustainable Palm Oil (RSPO) system that enjoys more international credibility and recognition. Oegrosono stated the CPOPC will formulate a new system that should harmonize existing ones. For sure, this new system will not allow palm oil plantation development in primary forests and peat lands, he added.
There has been much resistance in western countries against palm oil development as this industry leads to deforestation and palm oil has a negative impact on people's health due to the high level of saturated fat. However, palm oil is also a key edible oil that is used worldwide in a wide variety of products ranging from cosmetics to food or bio-fuels. Being the world's largest producer and exporter of palm oil, Oegrosono stated that it should be Indonesia (together with other key palm oil producing countries) that sets the standards regarding sustainable palm oil, not western countries such as France (which only imports about 100,000 tons of CPO per year). Oegrosono referred to France because this nation recently announced to impose a high progressive tax on imports of CPO and its derivatives, a plan that caused uproar in the palm oil producing countries (as it led to concern that other advanced economies will adopt similar taxes).
Indonesia and Malaysia, together, account for about 85 percent of the world's total palm oil supply. Other palm oil producing countries include Thailand, Papua New Guinea, the Philippines, Uganda, Ghana, Liberia, Nigeria, Brazil, and Colombia.
Indonesian Palm Oil Production and Export Statistics:
(in USD billion)
¹ indicates forecast
Sources: Indonesian Palm Oil Producers Association (Gapki) & Indonesian Ministry of Agriculture
More importantly CPOPC must devise plan to deal with:
* Smear and black campaign against palm oil industry
* Punitive countervailing duty against protectionist country like France.
* Unified voice in WTO to act against "enemy of free trade" nations.
* Concerted effort to use oil palm to eradicate poverty and grow economy.
* Implement "Hypocrisy Tax" against environmentally hypocrite countries like France.