Plan to import crude palm oil in April
The government will import 40,000 tonnes of crude palm oil from neighbouring countries this month in an attempt to curb the rising production cost of cooking palm oil and protect consumers.
However, the industry noted that the government’s action could hurt farmers, as the price of oil-palm fruit would soon drop. The government is also considering spending Bt68 million to Bt115 million in subsidy measures to maintain the retail price.
After discussions with the Energy Ministry yesterday, Commerce Minister Boonsong Teriyaphirom said the government would seek Cabinet approval soon for getting PTT to import cheap crude palm oil under its contract farming for sale directly to refineries.
Boonsong said the import price should not exceed Bt30 per kilogram, and this would help cap the retail price of cooking palm oil at Bt42 per litre bottle.
The move came after producers of cooking palm oil asked for an Bt8 increase in the retail price to Bt50 a bottle, saying they faced higher raw-material costs after crude palm oil surged to Bt34-Bt35 a kilo.
Energy Minister Arak Chonlatanon said the palm-oil shortage in the country had not affected biodiesel production as palm oil accounts for only 5 per cent in the current formula. In addition, the local price of crude palm oil is quoted at Bt34 per litre.
Boonsong said the government would import crude palm oil only in April after finding that producers have stockpiles for only two weeks.
“The cheap import of palm oil should also force palm-oil producers to lower the price,” Boonsong said.
However, a source from the palm-oil industry claimed that the government’s move showed it was ignoring farmers and the palm-oil millers, as the industry has a close relationship with the main opposition Democrat Party.
The source said enterprises currently had more than 210,000 tonnes of crude palm in stockpiles. The industry should be able to supply domestic consumption for another two months.
“The import of crude palm oil will only create problems for millers and hurt farmers, as the price of oil-palm fruit will drop soon,” said the source.
To balance benefits among farmers, producers and consumers, the government should allow a price increase to reflect the real cost of production and prevent a repeat of the shortage problem in the near future, the source said.
