KUALA LUMPUR (Oct 13): Prime Minister Datuk Seri Najib Razak believes that the agreement to establish the Council of Palm Oil Producing Countries (CPOPC) with Indonesia will boost the bilateral relationship between the two countries.

"The formation of the CPOPC is the biggest achievement in the bilateral relations between Malaysia and Indonesia, and will bring greater benefit to the wider palm oil industry," Najib said on his Twitter account.

Bernama had reported earlier that the idea to establish CPOPC has been in the pipeline since 2006, and was formally agreed between Najib and Indonesian president Joko Widodo during a meeting at the Indonesian presidential palace in Bogor on Sunday.

The council would set new standards in the production of palm oil and cooperate on managing world stockpile, the report stated.

"The council will benefit the industry and it would act against anti-palm oil lobby and the discrimination which would arise. We will act together," Bernama quoted Najib as saying.

The prime minister added that the council would also develop green economy zones and boost the socio-economic development of the smallholders.

The report also quoted Najib as saying that the council would be headed by a chief executive, whose name would be unveiled at the official Asean summit in Kuala Lumpur on Nov 15.

Meanwhile, an analyst who wished to remain anonymous told theedgemarkets.com that with the establishment of CPOPC, what matters at the end of the day has a lot to do with the execution.

"For example, if Indonesia executed its biodiesel programme as intended, stockpile would have dropped by quite a bit.

"With the CPOPC, it will be a form of cartel like the Organization of the Petroleum Exporting Countries (OPEC), at best. Otherwise, it will just be a lip service," the analyst said.

Malaysia and Indonesia jointly produce more than 80% of the world's palm oil.