The Energy Ministry said yesterday that the local palm oil price would rise, because production of biodiesel this year was expected to reach 160,000 litres per day.

The ministry's deputy permanent secretary, Pornchai Rujiprapa, said palm-oil production would have to increase to meet the consequent demand for about 200,000 tonnes per year.

The ministry's promotion of biodiesel production should sustain the price of local palm oil, he said.

The country has five biodiesel factories in operation, with a total capacity of 100,000 litres per day. Some of them are small- and medium-sized operations with capacities between 5,000 litres and 50,000 litres per day. They use edible oil waste as a major raw material but can also be adapted to use palm oil.

Meanwhile, new three factories in Chon Buri, Krabi and Surat Thani are expected to begin biodiesel production this year, with a combined capacity of 60,000 litres per day. They will lift the country's production to 160,000 litres per day.

Four more plants will start operations in the middle of next year with a combined capacity of 1.1 million litres per day. At this point, the factories will require a total of two million tonnes of palm oil per year to cater to biodiesel production.

The Energy Ministry said it wouldn't import palm oil, but would promote local production by providing technical support and advice.

 Major biodiesel producers that will start production next year include the Italian-Thai Group, the Charoen Pokphand Group and PTT Chemical Co Ltd.

Caretaker Energy Minister Viset Choopiban said that the ministry was following last year's Cabinet resolution which stipulated that a diesel mixture containing 5 per cent biofuel should be available throughout the country in 2011 and a diesel containing 10 per cent biofuel should be available the following year.

At that point, Thailand will be using 8.5 million litres of biodiesel per day.

The Agriculture Ministry is promoting the planting of oil palms and other plants used in the production of biodiesel on expectation that demand will soar.

Viset said it would not be necessary for Thailand to import biodiesel because the Energy Ministry would continue to support the locally made product.