Thailand's crude palm oil stocks are expected to decline to 310,000 tonnes at the end of this month from 532,000 tonnes last November thanks to the government's measures to curb the palm oil surplus.
Energy Minister Siri Jirapongphan said concerted efforts by the Energy and Commerce ministries have successfully lowered the crude palm oil stocks after the level surged to 532,651 tonnes in November 2017, much higher than the safety level of 300,000 tonnes.
The surplus led the prices of fresh palm nuts to drop by 18%, averaging 3.37 baht per kilogramme during the period.
Nathporn Chatusripitak, spokesman for Deputy Prime Minister Somkid Jatusripitak, said the surplus was largely because of a higher fresh palm nut supply in 2017, some 13.5 million tonnes, dwarfing the projection of 11.7 million.
To curb the price dip, the cabinet on Dec 12 last year assigned the Commerce Ministry to increase exports of crude palm oil to buyers such as China and India to 100,000 tonnes a month, while the Energy Ministry was told to promote the use of crude palm oil in biodiesel production.
Mr Siri said the two ministries succeeded in cutting stocks by 200,000 tonnes over the last two months, with the Commerce Ministry shipping 157,000 tonnes and the Energy Ministry increasing the use of crude palm in biodiesel production from 4 million barrels a day to 6 million barrels.
As a result, the Energy Ministry reported biodiesel stocks rose significantly to 109 million litres from 92 million litres.
Prices of fresh palm nuts also rose to 4.10 baht per kg in January, with the prices expected to increase to 4.20 baht at the end of this month, he said.
Mr Siri said despite falling state stocks, the two ministries pledged to keep up cooperation to create longer-term stability as well as competitiveness in the Thai palm industry.