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Published on January 16, 2008

"The imports should help solve the shortage of palm cooking oil soon," Yangyong Phuangrach, director-general of the Internal Trade Department, said after the edible palm oil committee's subcommittee proposed the move to balance supply at its meeting yesterday.

The edible palm oil committee will make the final decision on imports today.

Turning to imports is an urgent measure to solve the short-term domestic shortage. All 30,000 tonnes would have to be all imported by the end of next month.

The subcommittee meeting included the Crushing Palm Oil Association, Oil Palm Plantation and Palm Oil Association of Thailand, and the Palm Oil Refiners Association.

The meeting agreed to import 30,000 tonnes of crude olein, used for vegetable cooking oil, which was not seen as enough to threaten local oil palm farmers, said Yangyong, who is also chairman of the committee.

Oil palm nuts would also flood the market when the harvest season starts in March, he added.

The department's inspection of producers' warehouses showed palm-oil stocks were adequate, but the price of palm oil has still surged.

For instance, an 18-litre tank of cooking oil has jumped to Bt610 from Bt470 a year ago.

The ministry has not yet decided where to buy the crude olein as Malaysia, the world's largest supplier, also faces a domestic supply crisis.

The median price of crude olein is Bt36 to Bt36.50 per kilogram, which is subject to a 5-per-cent import duty.

Thavee Srisukon, president of the Oil Palm Plantation and Palm Oil Association of Thailand, said the most likely import source was Indonesia. The Malaysian government has suspended exports as security stocks have fallen below the normal level of 5 million to 6 million litres. That country has also rationed purchases by consumers after it had aggressively exported palm oil to China, the European Union, India and Pakistan since last year.

Petchanet Pratruangkrai

The Nation