Price of palm oil to rise by Bt1-2 per litre

The Commerce Ministry has agreed to allow palm oil producers to increase the price of a one-litre bottle by 1–2 baht, to 49–50 baht, while oil palm growers in the southern provinces are demanding that the ministry step in to stabilise the price of oil palm seeds.

Wittayakorn Maneenetr, director-general of the Department of Internal Trade (DIT), said that the palm oil administration panel, at its third meeting, agreed to allow two out of four palm oil producers seeking price increases to increase the price of palm oil by 1-2 baht per litre.

He offered an assurance that there is sufficient palm oil to meet the needs of the industrial sector, for export and for the energy sector, adding that the government has a plan to increase the use of palm oil in the energy sector by switching the production of B5 biodiesel to B7 and B20 biodiesel to meet domestic demand.

The use of palm oil in the production of biodiesel has increased recently, from about 70,000 tonnes per month to about 100,000 tonnes. Palm oil seed production for April and May is estimated at 2.24 million tonnes and 2.5 million tonnes respectively.

Wittayakorn insisted that Thailand has a palm oil surplus for export, even though the Joint Standing Committee of Commerce, Industry and Banking has mandated that the export of palm oil needs prior approval as of April 7.

Meanwhile, Manas Phuttharat, chairman of the Federation of Oil Palm Growers of Thailand, complained that the prices of oil palm seeds have been declining from 7-8 baht per kilogramme to about 6 baht.

Representatives of the federation are scheduled to submit a petition to Commerce Minister Suphajee Suthumpun today, asking for government intervention to stabilise the price of oil palm seeds at 8.90 baht per kilogramme to reflect production costs.

The federation also proposed that B10 should be declared the standard biodiesel, so that more oil palm seeds would be absorbed by the energy sector which, would help stabilise the price of seeds.