Further oil palm price support measures in store
The government looks set to introduce more measures to shore up domestic oil palm prices on top of the price guarantee scheme.
Commerce Minister Jurin Laksanawisit said the additional measures include the compulsory order for all petrol stations nationwide to sell biodiesel B10, replacing B7, from Jan 1, 2020.
The ministry also vows to tighten measures to protect against smuggling oil palm from neighbouring countries; speed up exports of crude palm oil (CPO), notably to India; and install CPO automatic level gauges at crushing mills and refineries.
The automatic level gauges will enable regulators to observe real-time information on CPO stocks, giving them verifiable data to help with decision-making and prevent future smuggling.
The state-run Electricity Generating Authority of Thailand (Egat) will also be ordered to purchase palm oil to produce electricity.
In August, the cabinet approved a package worth 59 billion baht in price guarantees and subsidy schemes for rice and oil palm.
Of the total budget, 13.3 billion baht is for the price guarantee programme for rice, 21.4 billion for oil palm and 25 billion to subsidise production costs for rice farmers.
The cabinet agreed to set the guaranteed price for fresh palm nuts at four baht a kilogramme, for harvests from up to 25 rai per family.
The government expected 300,000 farmers to participate in the project, which will run from August this year to September 2020. To be eligible, planters must register with the Agriculture Extension Department and the money will be deposited directly into their BAAC accounts.
Thailand is expected to produce about 16.8 million tonnes of fresh palm nuts this year or about 3.02 million tonnes of crude palm oil. Of the total crude palm oil output, 1.2 million tonnes are scheduled for consumption and 1.2-1.3 million tonnes for power production.
The price of domestic fresh palm nuts hit a two-decade low in April at 1.60-1.80 baht per kilogramme, far below growers' costs and the average price of 3.45 baht per kg last year and four baht per kg in 2017.
The previous government spent 2 billion baht to rev up prices and ease farmers' hardships.
The prices of fresh palm nuts are quoted at 2.55-3.20 baht per kg.
Veerasak Somboonvoravong, a palm grower in Phangnga province, said the government should be aware of growers' production costs, particularly as fertiliser prices and oil palm fruit harvesters' wages remain relatively high.