Malaysia plans to give orangutans as gifts to countries that buy its palm oil as part of an “orangutan diplomacy” strategy to ease concerns over the environmental impact of the commodity.

The south-east Asian country is the world’s second biggest producer of palm oil, which is found in more than half of supermarket packaged goods – from pizza and biscuits, to lipstick and shampoos. Global demand for palm oil has been blamed for driving deforestation in Malaysia and neighbouring Indonesia.

Malaysia’s plantations and commodities minister, Johari Abdul Ghani, said on social media the country could not “take a defensive approach to the issue of palm oil”.

He said: “Instead we need to show the countries of the world that Malaysia is a sustainable oil palm producer and is committed to protecting forests and environmental sustainability.”

Giving orangutans to trading partners such as the EU, China and India would “prove to the global community that Malaysia is committed to biodiversity conservation”, the minister said, likening the strategy to China’s “panda diplomacy”.

He also urged palm oil companies to collaborate with NGOs to help preserve and provide technical expertise on wildlife in Malaysia.

Malaysia is facing pressure from the EU, which last year approved an import ban on commodities linked to deforestation. Malaysia criticised the law as discriminatory.

The Bornean orangutan, which is endemic to the island of Borneo, is listed as critically endangered by the International Union for Conservation of Nature.

It is estimated that 100 years ago there were probably more than 230,000 orangutans in total, but the Bornean orangutan’s population is thought to be about 104,700, while the Sumatran orangutan, found in the north of the Indonesian island of Sumatra, is thought to have a population of about 7,500, according to the conservation group WWF.

Wildlife organisations have called on the Malaysian government to consider other ways to signal its commitment to protecting the species.

The environmental group Justice for Wildlife Malaysia said: “While we understand that orangutan diplomacy is one of the many options to address this issue, it is also crucial to explore alternative diplomatic measures to improve relations between the EU and the country.” The idea of orangutan diplomacy would require extensive scientific and legal research, said the non-profit research group.

“Protecting the forest, which is the natural habitat of orangutans, is the most important step that needs to be taken. The funds that would have been spent on orangutan diplomacy should be directed towards in situ conservation efforts for these primates and the preservation of their forest home.”

The Malaysian Primatological Society’s scientific adviser, Dr Felicity Oram, welcomed the government’s commitment to supporting coexistence with Malaysian wildlife, but said: “While the ‘panda diplomacy’ model has successfully promoted and funded the conservation of one iconic species, Malaysia has the potential to work cooperatively in our own way to facilitate wildlife conservation through habitat preservation, habitat rehabilitation, and coexistence with wildlife where they still survive in the wild, which can potentially have a much greater impact and set an example to others elsewhere to foster holistic on-site conservation management within their natural habitats.”

Beijing has long used panda diplomacy as a form of soft power, and typically loans the animals to foreign zoos, normally at a cost of $1m (£801,250) a year for a pair, with this money being spent on conservation. The pandas and their offspring are later returned to China to continue breeding.