Palm oil price slides amid lower demand for crude from producers
The price of palm oil has gone down even further as local producers are slowing down their purchases of crude at the current Crude Palm Oil (CPO) rate, a report in Thai business daily Thansettakij, said.
The rate has now dropped to Bt8 per kilogram from Bt12 because of the CPO rate of Bt63, while the price of palm fruit remains in the range of Bt10 to Bt12 per kilogram.
Bottled palm oil will be priced high at Bt78 if all refiners agree to purchase the crude at the current CPO rate of Bt63.
The price of palm fruit in major plantation areas in Krabi, Chumphon, Surat Thani, and Nakhon Si Thammarat provinces has dropped to Bt7.90 to Bt8.60 per kilogram, from Bt10-Bt12 per kilogram, as a result of slower demand. The price drop is a fallout of producers of bottled palm oil slowing down their purchases at the Bt63 per kg CPO rate when the price of palm fruit was on the slide.
One of the factors reportedly contributing to a high CPO rate is the government’s decision to abort the production of a number of biodiesel fuel formulas for vehicles, which has resulted in a sharp drop in demand for crude palm oil, Thansettakij reported.
From February 5 to March 15, only the B5 formula will be produced, down from three formulas.
The decision by the Energy Policy and Planning Office under the Ministry of Energy to produce only B5 is intended to keep the price of diesel petrol, which is a staple for low transport cost — at lower than Bt30 per litre, the business paper said.
