The government is set to introduce both short- and long-term measures to cope with the seasonal palm oil surplus to curb the fall of fresh palm nut prices.
Commerce Minister Sontirat Sontijirawong said as a short-term measure, the Commerce Ministry will cooperate with the Industry Ministry to require oil palm-crushing factories to buy fresh oil palm nuts with at least 18% oil content, a move to pressure farmers to produce higher-quality nuts.
The Commerce Ministry has pledged to boost exports of crude palm oil as much as possible, ordering the Foreign Trade Department to launch more stringent import measures to curb cross-border palm oil trade from neighbouring countries, which is limited to 40,000 tonnes a year.
Mr Sontirat said the ministry will work with the Energy Ministry to promote the production and use of biodiesel or B-20 for big trucks to absorb 250,000 tonnes of crude palm oil a year. This effort is expected to start over the next few months.
As for long-term measures, Mr Sontirat said the government plans to promote productivity among farmers and improve the quality of palm nuts that contain over 18% palm oil.
The ministry also assigned a working panel on oil palm to create an appropriate guideline to fell oil palm trees of 20-22 years and use higher-quality seeds in plantations.
The panel was also assigned an in-depth study on the long-term potential of Thailand's oil palm industry covering the production, processing and export positioning in the world market.
Fresh oil palm nuts are averaged at 3.20 baht per kilogramme, much below an average of four baht last year.
The Agriculture and Cooperatives Ministry forecast Thailand produced 15.4 million tonnes of fresh palm nuts this year, compared with 14.24 million tonnes in 2017.
The crude palm oil production is estimated at 2.7 million tonnes, while domestic demand, which includes human consumption and biodiesel, is predicted at 2.4 million tonnes.
Mr Sontirat said the ministry is scheduled to submit the measures to the national oil palm policy committee tomorrow for approval.