Blockchain trading of palm oil to be trialled next month
The Energy Ministry will begin trialling blockchain to trade palm oil next month in a bid to boost incomes for farmers by cutting out middlemen.
Energy Minister Sontirat Sontijirawong said that following talks with palm oil producers, the ministry will launch the pilot blockchain project in the next two weeks to link farmers, traders and B100 biodiesel production plants and extraction plants.
The ministry will select B100 factories to take part in the project, favouring those which have their own palm oil exactor. The trial is expected to last one month before blockchain trading is rolled out to the whole palm oil industry.
The Energy Ministry is in talks with PTT over its readiness to join the trial, as almost 50 per cent of Thailand’s oil refineries belong to the PTT Group. It will also discuss the possibility of B100 stock procurement, before expanding the talks to other oil traders, such as Bangchak and Esso.
The trial blockchain system has been developed by the Federation of Thai Industries (FTI). The system will name the purchase price, based on the crude palm oil (CPO) price, in line with the price of B100 fuel. The aim is to drive up the price of bunches grown by farmers. The ministry’s Department of Energy Business will be responsible for determining the CPO price that will be used in the trial, which will be calculated according to a formula and price structure that avoids affecting the market price.
The Energy Ministry wants the palm oil sector and all farmers to enter into blockchain trading, or the system for online trading, by the end of this year so as to solve the problem of palm underpricing and also prevent smuggling.
