Commerce Ministry investigates oil palm price drop

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Photo courtesy of Bangkok Post

The Commerce Ministry directed the Internal Trade Department to investigate the recent drop in oil palm prices by visiting provinces known for palm plantations. This initiative follows complaints from growers about reduced purchase prices.

Commerce Minister Phumtham Wechayachai instructed Wattanasak Sur-iam, director-general of the Internal Trade Department, to assess the situation in Phang-Nga, Krabi, and Surat Thani provinces. The goal is to identify the reasons behind the decline in oil palm prices and to propose preventive measures.

Wattanasak reported that the local price of domestic fresh palm nuts fell from 4.98 baht per kilogramme to 4.60 baht within the past week. He attributed this decline to an oversupply from April to May and the poor quality of nuts caused by extremely hot weather. The heat prevented the nuts from ripening naturally, which reduced the percentage of palm oil and consequently lowered the purchase price.

“The prices of local fresh palm nuts are expected to recover after farmers were advised to delay their harvest and only cut fully ripened nuts to secure better prices.”

The department has also instructed buyers and palm oil production plants to maintain their purchasing activities as usual and to avoid causing nuts to fall prematurely. Violators could face up to five years in prison, a fine of 100,000 baht, or both, as stipulated by the Price of Goods and Services Act of 1999.

Officials have been ordered to inspect the purchases and verify the accuracy of scales at dumping yards and palm oil plants to prevent the exploitation of farmers.

This year, fresh palm nut production is estimated at 18.1 million tonnes, slightly down from 18.3 million tonnes in the previous year. Out of the total supply, approximately 3 million tonnes are designated for crude palm oil production, with 1.3 million tonnes allocated for domestic consumption, 1.08 million tonnes for biodiesel production, and 800,000 tonnes for export, reported Bangkok Post.

Thailand currently holds crude palm oil stocks of 200,000 tonnes.

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