05/10/2015 (Reuters) - Indonesia and Malaysia plan toset up an intergovernmental organisation of palm oil producers to ensure further industry cooperation between the world's top producers and prop up prices, ministers from both countries said.

The organisation, which is going to be called Council of Palm Oil Producer Countries, will coordinate palm oil production, manage stocks and stabilise palm prices, Indonesia's Coordinating Minister for Maritime Affairs Rizal Ramli said in a news conference with Malaysian officials on Saturday.

Malaysian palm oil futures fell to 2,387 ringgit ($541.27) a tonne on Friday's closing after hitting a 15-monthhigh earlier in the week. The benchmark price was far below itspeak of 3,967 ringgit ($899.55) in 2011 during the commodity boom.

"If we are on our own, there will be unnecessary competition. But if we're together, we'll control 85 percent of the palm oil market," Ramli said, adding he will invite another southeast Asian palm producer Thailand to join the council.

Malaysia's minister of plantation industries and commodities, Dato' Douglas Unggah, said the new council would promote sustainable practices in palm oil industry.

Ramli led an Indonesian delegation to visit Malaysia at the end of August to discuss about the plan, during which an agreement for further cooperation was reached.

The two governments plan to establish the council after Indonesian President Joko Widodo meets his counterpart Malaysian Prime Minister Najib Razak, Ramli said.

Previous attempts to develop better palm relations between the two countries have had limited success.

($1 = 4.4100 ringgit)