Kittiratt seeks nod to cool palm-oil prices
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Deputy Prime Minister and Finance Minister Kittiratt Na-Ranong will propose to the Cabinet on May 20 a package to solve the problem of rising cooking palm oil price by boosting stocks and importing palm oil, according to government sources.
Kittiratt who is also chairman of the committee for palm-oil policy, will ask the ministers to create palm oil stocks. The stocks will be divided into three levels.
The first one is a normal level of 202,500 tonnes, or one and a half times the monthly demand.
The second is a warning level, equal to 168,750 tonnes, equivalent to 1.25 times of monthly demand.
Third is the crisis level of 135,000 tonnes, less than one time of demand.
The stock formula is based on an average demand of 135,000 tonnes per month this year.
Palm-oil refinery factories have to report their stocks to Kittiratt every 15 days.
Information on the level of stocks would help the government take timely action to tackle cooking palm oil price. For example, when the stocks drop to crisis level, the government could import palm oil.
Kittiratt will also submit to the Cabinet guidelines for importing palm oil to solve local shortages.
These guidelines include an import quota under the World Trade Organisation’s rule of 4,860 tonnes with import tariff of 20 per cent. Quantity beyond the WTO quota is subject to higher tariff rate of 143 per cent.
Under the Asean Free Trade Agreement, palm oil imports are not subject to tax or quota.
Import under the free-trade deal between Asean and China is subject to the same tax rate as the WTO.
Import under the free-trade agreement between Thailand and Australia and New Zealand, to take effect in January 2015, is not subject to tax or quota.
