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Palm oil price guarantees

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To reverse shortages of palm oil in the future, an incentive to plant more trees is needed. 

palm oil stats

Thailand has lagged behind its neighbors Malaysia and Indonesia for quite a while (See previous article, map of world producers and numbers in above table).

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BAAC: Guarantee for palm oil crop prices: Must have incentive for farmers to switch by Wichit Chantanusornsiri

palm oilThe government should ensure the prices of palm oil to encourage farmers to grow more palm trees or switch from rubber, says Lak Wachananwat, president of the Bank for Agriculture and Agricultural Cooperatives (BAAC).

Given the current severe shortage of palm oil that has caused prices to skyrocket, the government is encouraging palm tree growers to increase their productivity.

Heavy rain and floods in plantation areas in Indonesia and Malaysia have exacerbated the shortage. The two countries are key suppliers of palm oil.

However, Mr Lak said it's difficult to ask the growers to increase output as most of the plantation areas are occupied with other economic crops. And most of the areas suitable for growing palm trees already grow rubber.

Rubber prices are also rising rapidly, making it unlikely that growers will switch crops anytime soon. Apart from producing rubber sheets, growers can earn extra money from selling parawood, which also has rising prices, when the trees no longer produce latex.

It normally takes three-and-a-half years to grow palm trees.

According to BAAC's account year ending in March this year, the amount of loans granted to palm growers is likely to stand at over 2 billion baht, closed to last year's figures.

Land for palm tree plantation increased only 4.8% in 2010 from the year before, but productivity per rai declined by 9.6%.

In a related development, the Commerce Ministry through the Public Warehouse Organisation will speed up the import of the second lot of 60,000 tonnes of palm oil this month as the shortage remains unresolved. The government approved the import of 120,000 tonnes in addition to the first approval of 30,000 tonnes.

However, the ministry does not know the import price yet and still cannot confirm whether the local sales price will remain at 47 baht per litre.

Commerce Minister Porntiva Nakasai said it expects the new harvest of palm nuts in April would drop by 50% from last year so the imports are necessary.

(Source: Bangkok Post, BAAC: Guarantee palm oil crop prices, Must have incentive for farmers to switch, 8/02/2011, Wichit Chantanusornsiri, link

palm oil - an edible plant oil used in cooking and also to make biodiesel fuel for cars (SeeWikipedia)
lagged behind - not growing as fast, smaller, not as big as

guarantee - a promise that something will be done or will happen คำรับรอง, การประกัน (here: a promise by the government that farmers will receive a reasonable price for their crops) (See glossary)
- a reward to encourage people to act in certain ways, to make people do something, that encourages certain types of behaviour สิ่งกระตุ้น

- to change เปลี่ยน
ensure - to make certain that something happens or is done ให้การยืนยัน รับรอง
encourage - to make someone more likely to do something, or to make something more likely to happen ปลุกใจ

current - of the present time ปัจจุบัน
severe - very serious and worrying ที่รุนแรง ที่น่าเป็นห่วง
shortage - when there is not enough of something การขาดแคลน
skyrocket - to increase very quickly ลอยขึ้นสูงอย่างฉับพลัน
productivity - producing more for the same amount of resources and resources (labour, capital, machines), the speed at which a worker, company, or country produces goods (some are faster than others)
exacerbate - make situation worse
plantation - a large farm where crops such as tea, coffee, cotton, sugar or, in this case, trees, are grown ไร่ นาขนาดใหญ่
key - important คนสำคัญ

occupy - be present and exist at a place
X occupied with Y - X is present and exists at place Y
suitable - right and acceptable for a situation เหมาะสม

parawood - the wood from the rubber tree (See Wikipedia)
latex - natural rubber, a milky white sap found in many trees, used in surgical gloves, condoms, and clothing (See Wikipedia on latex and rubber)
account - a written or spoken report about something that has happened บันทึกถ้อยคำ, การอธิบาย
granted - officially given
figures - statistics, numbers describing the economy

development - the gradual growth and formation of something
import - to buy or bring in products from another country นำเข้า
lot - a group or set of things or people
remains - the body of a person or animal that has died ซากศพ
approval - official permission การอนุมัต
ministry - a government department dealing with an area of activity กระทรวง
confirm - state that an arrangement will happen for sure (for example, the financing for construction was confirmed, the hotel reservation was confirmed) ยืนยัน
local - in this country (here: Thailand)
harvest - gathering fully grown crops from the field เก็บเกี่ยว, การเก็บเกี่ยวผลผลิต

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