Thai Commerce Ministry To Decide On Price Hike For Cooking Palm Oil

[webfact]

Commerce Ministry to Decide on Price Hike for Cooking Palm Oil

The Commerce Ministry says a sub committee overseeing palm cooking oil is set to reach a conclusion on a proposed price hike.

The Permanent Secretary for Commerce, Yanyong Puangraj, said the sub committee in charge of overseeing cooking palm oil has yet to decide on a proposed price increase, noting that retailers are required to sell bottled palm oil at the suggested price of 38 baht a bottle for the time being.

According to sources, the panel is scheduled to meet to further discuss the possible hike that was proposed last month.

Manufacturers demanded that the price be increased by ten baht, since raw palm costs 38 baht per liter.

However, the Commerce Ministry argued that an increase of ten baht will pose too much of a burden on consumers.

Earlier, the ministry proposed importing raw palm oil from Malaysia to help manufacturers save on costs.

The proposal is still being considered by the National Palm Oil Committee, chaired by Deputy Prime Minister Suthep Thaugsuban.

Another proposed measure was that a price hike should be gradual, with an initial increase of between five and nine baht.

-- Tan Network 2011-01-05

[asiawatcher]

With many Palm Oil farms around Thailand and many more in the making, now the most stupid thing they could do is import! But a question - the report says the raw cost by manufacturers is 38 Baht - then why is the farmer getting paid less than 1-3 Baht per kilogram of fruit husk, which produces around 30+% in oil? A boiler/extraction and press and they output millions of litres so I think the 38 Baht a litre is a gross exaggeration. I would tell the 'manufacturers' to justify the claim. Show the investment and the return (ROI). And I have been researching ROI on these farms and rubber for years! There is still plenty of 'fat' (no pun intended) in the deal for the retailers at 38 resell and the Permanent Subcommittee Secretary should dig deeper before making any decisions.

Edited January 5, 2011 by asiawatcher

[webfact]

Ministry Ponders Palm Oil Import

To help alleviate the problem of rising palm oil manufacturing costs in Thailand, the Commerce Ministry will discuss possible import of raw palm oil with agencies concerned.

Director general of the Internal Trade Department, Watcharee Wimuktayon, said the National Palm Oil Policy Committee, headed by Deputy Prime Minister Suthep Thaugsuban, will meet next week to decide on the import of raw palm oil.

This is hoped to alleviate the shortage of palm oil in the country and help prevent a drastic rise in cooking oil price.

The Alternative Energy Development and Efficiency Department reported that the country currently has only 70,000 to 80,000 tons of palm oil in reserve, a huge drop from the normal level of 120,000 to 150,000 tons.

This affects domestic cooking oil consumption more than biodiesel production as Thais consume 900,000 tons of palm oil a year while only 380,000 tons are used to produce biodiesel.

Therefore, there is a strong possibility that the panel will approve the import of palm oil for domestic consumption at 30,000 to 50,000 tons, most likely from Malaysia.

The next harvest of palm oil is expected from March to May at 150,000 tons per month.

-- Tan Network 2011-01-05

[Thai at Heart]

With many Palm Oil farms around Thailand and many more in the making, now the most stupid thing they could do is import! But a question - the report says the raw cost by manufacturers is 38 Baht - then why is the farmer getting paid less than 1-3 Baht per kilogram of fruit husk, which produces around 30+% in oil? A boiler/extraction and press and they output millions of litres so I think the 38 Baht a litre is a gross exaggeration. I would tell the 'manufacturers' to justify the claim. Show the investment and the return (ROI). And I have been researching ROI on these farms and rubber for years! There is still plenty of 'fat' (no pun intended) in the deal for the retailers at 38 resell and the Permanent Subcommittee Secretary should dig deeper before making any decisions.

I know one of the families involved in this industry. Believe me, it is hard to make a profit when you buy for 3 baht and sell for 38. I mean, how can you afford the fleet of family Mercedes SL 500s and last time I saw them a new Bentley, 100 mn baht houses, public school education in the UK for the little angels,US University, and all the rest when you have a net margin of only 60 or 70%.

[RedQualia]

With many Palm Oil farms around Thailand and many more in the making, now the most stupid thing they could do is import! But a question - the report says the raw cost by manufacturers is 38 Baht - then why is the farmer getting paid less than 1-3 Baht per kilogram of fruit husk, which produces around 30+% in oil? A boiler/extraction and press and they output millions of litres so I think the 38 Baht a litre is a gross exaggeration. I would tell the 'manufacturers' to justify the claim. Show the investment and the return (ROI). And I have been researching ROI on these farms and rubber for years! There is still plenty of 'fat' (no pun intended) in the deal for the retailers at 38 resell and the Permanent Subcommittee Secretary should dig deeper before making any decisions.

Corporations are usually not known for generosity over and above their bottom line(s). It's my belief that a - most manufacturers, acting independently, would stop manufacturing a product that costs the same amount to make as its selling price. And b - nor would stockholders invest in a company that returns no profit. If the company reply was that it had other products to offset the loss on palm oil, then we're back at a: no reason to lose money on palm oil if they're making money on other products.

Edited January 5, 2011 by RedQualia

[pipo1000]

With many Palm Oil farms around Thailand and many more in the making, now the most stupid thing they could do is import! But a question - the report says the raw cost by manufacturers is 38 Baht - then why is the farmer getting paid less than 1-3 Baht per kilogram of fruit husk, which produces around 30+% in oil? A boiler/extraction and press and they output millions of litres so I think the 38 Baht a litre is a gross exaggeration. I would tell the 'manufacturers' to justify the claim. Show the investment and the return (ROI). And I have been researching ROI on these farms and rubber for years! There is still plenty of 'fat' (no pun intended) in the deal for the retailers at 38 resell and the Permanent Subcommittee Secretary should dig deeper before making any decisions.

And how do you explain this?

GOOD PREDICTION !! this week (01/01/2011)..............Father in law recieving 7 bht for palm oil . There is such a shortage that govt are considering importing from Malaysia. <BR sab="1835">

http://www.thaivisa.com/forum/topic/150263-palm-oil/page__view__findpost__p__4130852

[tigermonkey]

Instead of trying to perpetuate the use of palm oil through price manipulation and/or subsidy, they should be aggressively pursuing the replacement of palm oil with a healthy alternative.

Palm oil has a ridiculously high amount of saturated fat. Its supporters make claim to the absence of trans fats, but they can't deny that palm oil is a proven health threat.

The Thai government should be progressively working towards replacement of palm oil with canola or soybean oils. The long term health benefits, and resultant medical cost savings are the things that the Thai government should be looking for -- not just cheap cooking oil !

[NHJ]

they should promote soybean oil wich is good for health unlike palm oil...

[bushwacker]

Instead of trying to perpetuate the use of palm oil through price manipulation and/or subsidy, they should be aggressively pursuing the replacement of palm oil with a healthy alternative.

Palm oil has a ridiculously high amount of saturated fat. Its supporters make claim to the absence of trans fats, but they can't deny that palm oil is a proven health threat.

The Thai government should be progressively working towards replacement of palm oil with canola or soybean oils. The long term health benefits, and resultant medical cost savings are the things that the Thai government should be looking for -- not just cheap cooking oil !

I totally agree with you. Maybe by changing they might see their medical costs also decrease. :jap:

[webfact]

Palm Oil Price Meeting Postponed

The Commerce Ministry has decided to postpone deliberation on the local palm oil price hike originally scheduled for today.

The ministry is awaiting the National Palm Oil Policy Committee’s say on solutions to the shortage problem.

Commerce Minister Pornthiva Nakasai has called off a planned meeting of a subcommittee in charge of vegetable oil price, chaired by Internal Trade Department Director General Watcharee Wimuktayon.

The meeting was scheduled to consider a price increase for the one-liter bottle of palm oil.

It was reported that the postponement was made as the Commerce Ministry would prefer to wait for the National Palm Oil Policy Committee’s meeting on Thursday to decide on the country’s import of raw palm oil from Malaysia.

The anticipated import would involve 50,000 tons of palm oil to be brought in during January and March.

The ministry now plans to hold the meeting on the palm oil price later to ease the shortage problem and to tackle the stockpiling of palm oil in the country as well as to help lower consumers’ burden.

The palm oil price raise was demanded by business operators, who wish to see the price of one-liter bottle of palm oil up by 10 baht to 48 baht.

The Commerce Ministry initially objected to the 10 baht increase, saying such a sharp rise will seriously affect consumers.

It also said an increase by five to nine baht on a gradual basis will be more acceptable.

-- Tan Network 2011-01-06