Drop palm oil as a fuel mix: trade group
The Association of Palm Oil Extractors yesterday urged the government to support the crop for food processing instead of using it for bio-diesel fuel, an industry that is still in its infancy.
Krissada Chawananan, president of the association, said rapid expansion of the local food industry has spurred demand for palm oil. He said the government should pay more attention to ensure adequate supplies for the food sector. He noted the state policy to establish a bio-diesel manufacturing plant had only just begun and had yet to be built, he said. Palm oil can be added to diesel to make bio-diesel. "People are interested in bio-diesel as alternative energy because oil prices have risen so much. But we have not yet seen the construction of a big-scale manufacturing plant [to serve the energy sector]," Krissada said. The support from palm plantations for bio-diesel is limited, he said. One reason, he said, was the cost of raw palm oil must not exceed Bt14 per litre in order for bio-diesel to compete against diesel fuel. This factor alone will not coax manufacturers to focus on bio-diesel because the returns will not be substantial enough to justify the cost of investment, he noted. At present, crude palm oil is already selling for Bt14 per litre. On the other hand, palm is an important raw material for both the food and consumer goods industry. In addition, rising foods exports will require more palm oil supplies. Palm oil is seen as a healthy food additive and therefore it holds a bright future in the food and consumer industries, he said. Last year, the government backed a plan to produce 300,000 litres of bio-diesel fuel a day by 2007. To accomplish his goal, Thailand needs to cultivate 4 million-5 million rai of palm, probably in the South and Northeast.
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