The Energy Ministry is preparing to adopt food traceability technology by June to prove that crude palm oil is locally produced and prevent smuggling from neighbouring countries, aiming to deal with the huge annual surplus.
Energy Minister Sontirat Sontijirawong said the ministry will randomly inspect crude palm oil at 14 warehouses nationwide, checking the volume of methyl ester, also known as biodiesel B100.
Crude palm oil for consumption is regulated by the Commerce Ministry.
"This technology will trace hydrocarbon composites in crude palm oil for B100 to prove the original plantation areas," Mr Sontirat said. "The Energy Business Department will proceed with procurement of automatic tank gauges that can trace origins. There are 14 warehouses with 76 tanks for crude palm oil storage."
The department said each gauge costs roughly 3-5 million baht. Mr Sontirat said the equipment will be installed on the 76 crude palm oil tanks by October.
"The gauge equipment will make a real-time report to a petroleum digital platform, adopted by the ministry," the energy minister said. "Some 42 tanks are already equipped with this equipment for a trial period, and the department collected data on the original plantation areas."
Mr Sontirat said the system is similar to the DNA classification of crude palm oil to determine origin.
"If we find that any crude palm oil is not from local plantation areas, Thai purchasers must reject this volume," he said.
Mr Sontirat said the ministry aims to balance crude palm oil production in the country because there has been a large surplus the past two years, resulting in lower domestic prices.
Under Thai law, import of crude palm oil is prohibited.
According to the ministry, the price of fresh palm nuts is 7-8 baht per kilogramme, compared with 1.8 baht two years ago.
Crude palm oil in January cost 38.20 baht per kg, while the B100 price was 39.74 baht per litre.
Mr Sontirat said the ministry is promoting B10 as a fundamental diesel at local petrol stations, replacing B7 to absorb the crude palm oil surplus.
"The latest biodiesel enforcement has increased the local price of palm oil," he said. "The supply is roughly 3 million tonnes a year. One million tonnes each are allocated as cooking palm oil and biodiesel B7, resulting in some 1 million tonnes of surplus volume."