The Commerce Ministry will propose several measures aimed at tackling the domestic oil palm price slump to the cabinet on Tuesday, according to minister Sontirat Sontijirawong.
The measures will help to address the problem systematically, Mr Sontirat said on Monday.
These include requirements for the Electricity Generating Authority of Thailand (Egat) and Provincial Electricity Authority (PEA) to use 160,000 tonnes of crude palm oil a year to produce electricity, he said.
This would help to reduce the palm oil stock from 440,000 tonnes to 200,000-250,000 tonnes by the end of this year, Mr Sontirat said.
Bangpakong Power Plant in Chachoengsao and Ratchaburi Power Plant in Ratchaburi are among those that have reportedly been asked to receive the palm oil.
Another measure involves seeking a 525-million-baht budget to subsidise participating palm oil exporters at 1.75 baht per kilogramme, which could push 300,000 tonnes of palm oil out of the country within five months, experts claim.
According to Mr Sontirat, efforts will also be made to promote the use of B20 and B7 biodiesel, which could absorb almost 60,000 tonnes of palm oil from the market.
B20 and B7 are alternative forms of fuel for transportation and logistical system. They are both blended with methyl ester (ME) or crude palm oil.
The Industry Ministry will issue a regulation that forces A-grade refinery plants to purchase palm nuts with palm oil content of more than 18%, he said. A-grade plants are referred to as those that buy whole oil palm bunches.
B-grade refinery plants, which buy only palm nuts, will be obliged to buy nuts with oil content of more than 30%. Those who fail to do so would run afoul of the law, he said.
The ministry will also work with the Customs Department to intercept palm oil smuggled into the country and stringent law enforcement will be used to deal with the offenders, he noted.
Referring to reports that bottled cooking palm oil was smuggled into the country and sold in government-designated Thong Fah Pracharat stores in the South, Mr Sontirat stressed that officers concerned were assigned to probe the issue. The shops are sales point for low-priced consumer products for low-income earners.
If the stores were found to have committed the offence, they would be withdrawn from the government scheme, he said.
Meanwhile, Democrat leader Abhisit Vejjajiva and other former party MPs in the South yesterday held a press briefing recommending measures to tackle the tumbling prices of palm oil and rubber.
Mr Abhisit said palm oil could be used to produce electricity at a power plant in Krabi for six months at a total cost of 3 billion baht, adding the move would help reduce the surplus of palm oil and push up prices.
The former premier said moving palm oil to the Bangpakong and Ratchaburi power plants would incur huge transportation costs.
Referring to measures to help shore up rubber prices, he called to boost the domestic usage of rubber, particularly by state agencies.
He said the administration must explain how much rubber it has used and help rubber farms diversify into other crops.