Producers of cooking oil demand further price rises

Palm-oil manufacturers say they are waiting for the ministry's Internal Trade Depart-ment to approve an increase of Bt6.50 per 1-litre bottle, from Bt43.50 per bottle to Bt50, in a second round of price increases following huge rises in raw-material costs. The price of palm oil increased Bt5.50 last year, from Bt38 a bottle to Bt43.50.

A source in the palm-oil industry yesterday said manufacturers were seeking another price rise because they were facing losses from aggressive rises in production costs.

"The government should allow the price rise. The cost of raw materials has risen aggressively, because of high demand for alternative energy in the world market," the source said, adding that the break-even retail price for palm oil would be Bt52 a bottle.

Under heavy demand as a feedstock in the production of biofuels, the price of crude palm oil has risen significantly in the past year, from between Bt17 and Bt18 per litre to Bt30. The price of palm fruit, from which the oil is extracted, has increased from Bt4 a kilogram to Bt6.40.

The source predicts a shortage of domestic palm oil in the near future, because manufacturers are decreasing production after suffering losses because of the low retail price.

Soybean and Rice Bran Processors' Association president Sethasan Sethakarun said his association was also seeking another price rise for soybean oil, because soybean prices had risen continuously since early last year, from Bt13 per kilogram to Bt19.40.

"We [soybean oil manu-

facturers] did not specify the price rise [we want] from the Commerce Ministry, but we're hoping prices will be allowed to increase soon, because manufacturers are losing from the rising costs of raw materials," he said.

Last month, the price of soybean oil rose from Bt40 per 1-litre bottle to Bt45.50.

Sethasan said many wholesalers and retailers were stockpiling vegetable oil, in order to speculate on retail-price in-creases. To solve this problem, he urged the government to allow a price rise soon, before there was a shortage of vegetable oil in the market. Internal Trade Department director-general Yangyong Phuangrach said the department would consider allowing another price hike.

However, it may not allow an increase as high as manufacturers are seeking, in order to cushion the burden on consumers.

"The department is considering allowing an increase of Bt3 a bottle in this year's first quarter," he said.

Petchanet Pratruangkrai

 The Nation