New panel to supervise oil palm situation
The government is setting up a subcommittee comprising three parties — government, farmers and entrepreneurs — to supervise the oil palm situation to prevent a possible cooking palm oil shortage and ensure sufficient supply in the country.
Speaking after the first meeting this year of the subcommittee on palm oil and palm oil management and marketing, Commerce Minister Jurin Laksanawisit said the meeting agreed to set up the new subcommittee which will be tasked with managing and balancing the supply of fresh palm nuts, crude palm oil and refined palm oil production to avoid a shortage.
In addition, the subcommittee will be made responsible for stabilising domestic prices of fresh palm nuts, crude palm oil and refined palm oil to ensure mutual benefits to all related parties including farmers, crushing factories, palm oil refinery plants and consumers.
According to Mr Jurin, the subcommittee would also have the function of analysing the situation regarding production, marketing, prices and other relevant factors that may affect the price of fresh oil palm nuts and palm oil as well as consider appropriate crude palm oil inventory and sufficient stocks to meet domestic demand.
Other functions of the subcommittee are to prevent palm oil shortages and determine measures, guidelines, terms of reference, criteria and methods to balance domestic palm oil in line with changing situations.
Mr Jurin said the meeting yesterday also ordered provincial commerce officers nationwide to inspect cooking palm oil stocks and report to the subcommittee every seven days from now on, partly to ensure there is enough cooking palm oil supply and that prices are appropriate.
Currently, Thailand has crude palm oil stocks of about 180,000-200,0000 tonnes, which is considered low compared with the 300,000 tonnes the country deems to be a safe level of stocks.
Cooking palm oil prices have sharply risen, driven mainly by an increase in the price of fresh palm nuts, which have shot up to 8-12 baht per kilogramme, three times higher than the state-guaranteed price of 4 baht per kg that is paid to farmers and compared with only 2 baht per kg over the past 2-3 years.
Based on higher production costs, domestic cooking palm oil prices should be raised to 76.5 baht per bottle.
In 2022, the fresh oil palm nut production is estimated at 17.9 million tonnes, up by 5% from last year’s season. The oil palm nut price on May 11 this year was quoted at 9.80-11.20 baht per kg, a rise of 52% from the corresponding period last year.
Based on higher production costs, domestic cooking palm oil prices should be raised to 76.5 baht per bottle.
However, the Commerce Ministry pledged to maintain the price of cooking palm oil at 66.5 baht per bottle as long as possible to prevent any impact on consumers.
However, the price in some areas may increase because of transport costs.