The cabinet on Tuesday approved the Ministry of Agriculture and Cooperatives' request to import 50,000 tonnes of crude palm oil to prevent shortage in January and February.
Deputy government spokesman Sansern Kaewkamnerd said local supplies presently stood only at 113,000 tonnes, while the ideal reserve level for local demand total 170,000 tonnes.
The cabinet on Tuesday approves a quick import of 50,000 tonnes of crude palm oil to prevent local shortage. (Photo by Jiraporn Kuhakan)
Past similar circumstances led to a speculative build-up of palm oil and caused sharp increases in the prices of related products, Maj Gen Sansern said.
He also the government Public Warehouse Organisation would be the importer. Therefore, import quantities would be strictly capped at 50,000 tonnes. Imports would finish by mid-February, the deputy spokesman added.
He added that the government promised to maintain the minimum price of fresh palm nuts locally at five baht per kilogramme.
Manas Buddharat, head of a club of oil-palm growers in Rangsit area of Pathum Thani, said that the 50,000-tonne import would affect local farmers because the majority of their palm nuts would arrive at markets in February, possibly leading to a glut.
He said the report of government palm oil imports already pushed down the price of oil-palm nuts by 40 satang, from 5.5-6 baht per kilogramme. He said he was afraid that prices might slide further to 3 baht while farmers' costs stood at 3.5-4 baht per kilogramme.