EGAT to purchase 200,000 tons more crude palm oil for electricity generation

[webfact]

EGAT to purchase 200,000 tons more crude palm oil for electricity generation

 

   

BANGKOK, 14 MAY 2019 (NNT) – On the attempt to solve low palm pricing, which is currently priced at 2-2.40 baht per kilogram which is below farmer’s cost, the Ministry of Commerce is planned to further reduce the quantity of excess palm oil in stock according to the Cabinet’s resolution by approving the purchase of additional 200,000 tons of crude palm oil for electricity generation in addition to 160,000 tons previously utilized at a price higher than market average to help bring up palm fruit purchasing price to 3 baht per kilogram.

 

The Department of Internal Trade (DIT) Director General Wichai Pochanakit revealed the department has sent a list of stock-assessed crude palm oil extractors to the Electricity Generating Authority of Thailand (EGAT) to consider purchasing more palm oil for electricity generation. The initial assessment of these extractors shows they are holding 208,000 tons of palm oil in stock, corresponding to EGAT’s purchasing target. The EGAT will start accepting registration from companies interested to sell palm oil on 16 May, with shipments expected to start from 22 May.

 

The DIT has estimated the appropriate purchase price of crude palm oil should be at 16.5 baht per kilogram, which is currently higher than average market price at 15.75-16 baht. The DIT’s pricing was calculated from 3 baht per kilogram palm fruit purchasing price which better reflect farmers’ costs. The purchasing price of crude palm oil this time is lower than the previous EGAT’s purchase at 18 baht per kilogram as extractors will not be responsible for transportation, quality control, losses, insurance, and contract insurance costs, as companies are only required to ship the oil to a central oil stock in Surat Thani, with further shipment to Bang Pakong Power Plant under the responsibility of EGAT.

 

The DIT expects this purchasing plan will help further reduce 200,000 tons of excess palm oil in stock from current amount at 300,000 tons, leaving only some 100,000 tons remaining. This condition will help raise palm fruit purchase pricing to 3 baht per kilogram, and make room to support new harvest hitting the market in July. The department predicted the in-stock palm oil quantity at the end of 2019 will be between 200,000 to 250,000 tons, which is well within the Safety Stock margin.

 

The EGAT has reassured this operation will not affect electricity price, and that it is discussing with the Ministry of Commerce on measures to cover increased costs.

 

 

-- © Copyright nnt 2019-05-14

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[Srikcir]

4 hours ago, webfact said:

approving the purchase of additional 200,000 tons of crude palm oil for electricity generation in addition to 160,000 tons previously utilized at a price higher than market average to help bring up palm fruit purchasing price to 3 baht per kilogram.

More subsidies for surplus agricultural crops paid by the Thai taxpayer that has no impact on global prices. It didn't help with rice and rubber. Why would palm oil be different?

Old solutions for the same policies failures.

[Cake Monster]

Keep on burning lads !

EGAT will buy your Palm Oil ( probably at about 1.00 - 1.20 Baht / KG )

[holy cow cm]

This is a direct result from PTP execs being down there last week and big head saying certain politicians are trying to discredit his government. Nothing more than that and again spending Thai tax payers money to make him and them look good. Too easy to see the moronic agenda.

[robblok]

3 hours ago, Srikcir said:

More subsidies for surplus agricultural crops paid by the Thai taxpayer that has no impact on global prices. It didn't help with rice and rubber. Why would palm oil be different?

Old solutions for the same policies failures.

But they all do it to keep the voters happy (you know the farming voting block). Sad for everyone else but that is how it is. Farmers first (let them pollute the air by burning) and then put their hand out for subsidies. 

[Wilsonandson]

11 hours ago, webfact said:

The EGAT will start accepting registration from companies interested to sell palm oil on 16 May, with shipments expected to start from 22 May.