The Commerce Ministry has ordered the Internal Trade Department to visit provinces with palm plantations as oil palm prices fell to find the cause and suggest preventive measures.
Commerce Minister Phumtham Wechayachai told Wattanasak Sur-iam, director-general of the Internal Trade Department, to visit the southern provinces of Phangnga, Krabi and Surat Thani to evaluate the cause of the decline in oil palm prices following complaints by growers of the reduced purchase prices.
Mr Wattanasak said the local price of domestic fresh palm nuts plunged from 4.98 baht per kilogramme to 4.60 baht last week because of oversupply from April to May. In addition to a glut, the nuts are low quality because of the extremely hot weather, meaning they did not naturally ripen, which decreases the percentage of palm oil, resulting in a lower purchase price, he said.
Mr Wattanasak said the prices of local fresh palm nuts are expected to recover after farmers were asked to delay their harvest and cut only palm nuts that are fully ripened to fetch good prices.
The department instructed palm nut buyers and palm oil production plants to continue purchasing as usual, and to refrain from making palm nuts fall unnaturally. Offenders could face a prison term of up to five years, a fine of 100,000 baht, or both, according to the Price of Goods and Services Act of 1999.
The department also ordered officials to inspect the purchases and the accuracy of the scales at dumping yards, as well as palm oil plants to prevent the exploitation of farmers.
Fresh palm nut production is estimated at 18.1 million tonnes this year, down from 18.3 million the year before. Of the total supply, about 3 million tonnes is for crude palm oil production, comprising 1.3 million tonnes for domestic consumption, 1.08 million tonnes for biodiesel production, and 800,000 tonnes for export. Thailand has crude palm oil stocks of 200,000 tonnes.