PWO seeks Bt300m to purchase red onion surplus
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The Public Warehouse Organisation (PWO), a state-owned enterprise overseen by the Commerce Ministry, will ask for an additional budget of Bt300 million to purchase an oversupply of red onions from the market amid severe price reductions.
The PWO has faced problems managing red-onion stockpiles that it has already bought from farmers. More than 10,000 tonnes of the vegetable are rotting and must be processed as fertiliser, as the organisation has been unable to deal with the stockpiles.
Previously, the PWO spent about Bt700 million to purchase red onions from the market, focusing on Si Sa Ket province, a major plantation area for that vegetable. The government now has another 10,000 tonnes in its stockpiles, only 40 per cent of which is reported to be of good quality. The rest has deteriorated.
PWO president Sarawut Sakulmeerit admitted that the organisation lacked the efficiency and tools to manage such large stockpiles of red onions. He said the government might have to dump some of them.
To be managed properly, red onions need to be kept in cold storage while the government seeks markets for them, he said.
Sarawut added that the government could not yet release the stockpiles to the market as it was afraid of pushing down prices even further.
Red onions are currently quoted at Bt5-Bt7 a kilogram, while the purchasing price for the government is Bt15 a kilo.
Farmers say they have faced serious losses due to the oversupply. Thai consumers have switched to imported red onions as they are much cheaper.
The government has no plan to help farmers manage their stocks and process red onions during the harvest season.
Meanwhile, the first lot of 10,000 tonnes of imported crude palm oil is expected to arrive on May 5 after the Cabinet approved the import of 40,000 tonnes from Malaysia to hold down retail prices.
Sarawut said this first lot should be enough to produce 6 million 1-litre bottles of cooking oil.
However, a source from the palm-oil industry said the imports would hurt palm growers by forcing down the price of palm fruit, as the harvest season will begin early next month.
Thailand has stockpiles of 150,000 tonnes of crude palm oil, adequate to supply domestic consumption for more than a month, the source said.
