PTT Plc, the national oil and gas conglomerate, has agreed to buy 100,000 tonnes of crude palm oil to produce biodiesel for export in a collaborative move to shore up domestic fresh palm nut prices.
Jariya Sutthichaiya, secretary-general of the Office of Agricultural Economics, said at the National Oil Palm Policy Committee meeting chaired by Deputy Prime Minister Prawit Wongsuwon yesterday the group endorsed PTT's purchase plan.
The government initiative is to drain the existing 400,000 tonnes of crude oil palm stock. Thailand normally maintains a crude palm oil stock of 250,000 tonnes a year.
The Commerce Ministry estimated some 3 million tonnes of crude palm oil would hit the market this year, up from 2.5 million tonnes in 2018.
Last year's volume left a surplus of 500,000 tonnes, and the government moved to increase the methyl ester content to 20% in biodiesel, or B20, as well as using crude palm oil to generate electricity.
Ms Jariya said the committee also authorised the Electricity Generating Authority of Thailand (Egat) increasing the use of crude oil palm for power generation at the Bang Pakong plant at a level of 1,500 tonnes per month, up from 1,000 tonnes. Previously, Egat agreed to absorb 160,000 tonnes of crude palm oil for power generation.
She said the entire crude palm oil stock is expected to be disposed of by May this year.
Fresh palm nuts sell for 2.40 baht per kilogramme, and the government anticipates a price increase to three baht a kg in May. Fresh palm nut production is estimated at 16.7 million tonnes this year, up 8% from 15 million tonnes in the 2018 harvest.