Bangkok: Palm oil farmers in Thailand have appealed to Deputy Prime Minister and Minister of Commerce, Ms. Supajee Suthamphan, to address pressing issues surrounding export controls and falling palm oil prices. The plea was made through a letter submitted by Mr. Manas Phuttarat, President of the Thai Palm Oil Growers Federation, highlighting the financial strain faced by farmers due to recent policy changes.
According to Thai News Agency, the complaint stems from measures imposed by the Central Committee on Prices of Goods and Services (CCPG) to control palm oil exports, which have led to a significant drop in the price of palm fruit. Prices have plummeted from approximately 8.90 baht per kilogram to as low as 6.50 baht per kilogram in regions like Krabi province, falling below production costs and severely affecting farmers' incomes. The federation warns that such measures may result in a surplus of palm oil in the domestic market, exacerbating the decline in raw material prices while production costs remain high at 7-8 baht per kilogram.
The Thai Palm Oil Growers Federation has proposed several government actions to mitigate these challenges. They include relaxing export controls to maintain market balance, officially adopting B10 as the standard diesel fuel to increase domestic consumption and reduce surplus, and promoting the use of palm oil in energy sectors. Additionally, the federation suggests improving the quality of palm oil to enhance oil extraction rates and reforming the purchase price structure to reflect costs and quality fairly. Mr. Manas also expressed concerns regarding the transparency of factory purchase prices, which have been steadily decreasing, making it difficult for farmers to adapt to market fluctuations.
Mr. Witiyakorn Maneenet, Director-General of the Department of Internal Trade, assured that the government is committed to listening to farmers' concerns and working collaboratively to find solutions. He attributed the recent decline in palm fruit prices to global market volatility, particularly in crude palm oil prices, and clarified that export permissions are meant to monitor data and manage supply rather than restrict trade. Mr. Witiyakorn emphasized that all export applications have been approved, and exports are proceeding as usual.
In terms of pricing, Mr. Witiyakorn cited forecasts from the Office of Agricultural Economics (OAE), projecting lower palm oil production this year due to erratic weather conditions. The Department of Internal Trade plans to monitor purchasing processes closely to prevent price manipulation and ensure fair treatment for farmers. Additionally, the expansion of B20 availability in gas stations is expected to boost domestic demand for biodiesel and support increased palm oil use in the energy sector, with a target to reach 200 stations by the end of April. The department is committed to investigating and ensuring balanced and fair management within the palm oil industry supply chain.