Indonesian and Indian businesspeople signed on Monday a business-to-business agreement on palm oil to build communications between producers and consumers of the commodity.

The agreement, a memorandum of understanding (MoU) on sustainable palm oil production, was signed by the Indonesian Palm Oil Board (DMSI), the Solvent Extractors Association (SEA) of India and civil society organization Solidaridad Network Asia.

“India uses our palm oil products a lot so we need to build communications not only between the two governments but also between associations,” Coordinating Economic Minister DarminNasution said during the MoU signing at the Office of the Coordinating Economic Minister in Jakarta.

He said a network of associations could help the government campaign about the use of palm oil in India and address misconceptions about the commodity.

“Because of the lower price, consumers in India consider palm oil a low-quality product, which is not true. Because palm oil yield is three to four times higher than other [vegetable] oils, we can provide a lower price,” Darmin said.

SEA president Atul Chaturverdi, who promised to campaign for the sustainable production of Indonesian palm oil, said the MoU would allow for better cooperation between Indian and Indonesian palm oil stakeholders.

“This MoU can be a way forward to create a sustainable model for Indonesia, which is good for smallholders as well as consumers of palm oil in India,” he said. (bbn)