Thai Commerce Ministry to propose buying oil palm at 4.20 baht a kilo

[webfact]

Commerce Ministry to propose buying oil palm at 4.20 baht a kilo

BANGKOK, 20 May 2015 (NNT) - The Ministry of Commerce will propose to the National Palm Oil Policy Committee today to regulate the price of palm fruit with 17 percent oil content, to be sold to refineries and middlemen at 4.20 baht a kilogram.

Commerce Minister Gen. Chatchai Sarikalya further explained that oil palm growers would have to absorb the transportation cost if they decided to sell palm fruit to middlemen. In the proposal, provincial governors will be tasked with overseeing the process, in order to ensure fairness.

As for long-term solutions to the low oil palm price, the Commerce Minister would ask the Ministry of Agriculture and Cooperatives to develop a better strain of oil palm and also propose the construction of palm oil tanks to store raw palm oil when the produce starts flooding the market.

He also touched upon a suggestion that the Public Warehouse Organization (PWO) purchase and store raw palm oil from refinery and selling it back to the market when demand precedes supply. General Chatchai said the PWO would only buy the oil when there are no other options available.


-- NNT 2015-05-20

[whatawonderfulday]

This has the potential to become the looney General's equivalent of the rice buying policy that him and his cronies are persecuting the Shinawatrs for. Same, same just a bigger, better developed and elitist supported bunch of pigs waiting to feed at the trough

[clockman]

Suthep, before used the palm oil scam!

[JAG]

What could be a palm oil equivalent of the ill fated rice scheme is mooted......as Suthep leaving the monkhood is in the air....

[dageurreotype]

Wonderful. Just wait for yet more swathes of land to be cleared for palm oil plantations which have already decimated the Gibbon population in Indonesia.

[MobileContent]

That would mean 1100 US$ compared to 674.00 US$ for the world market price per metric ton or a loss of around 450 US$ per MT.

Palm oil is going down for the past 3 years and I think the next guys will be the rubber guys that get a bailout.

[In the jungle]

That would mean 1100 US$ compared to 674.00 US$ for the world market price per metric ton or a loss of around 450 US$ per MT.

Palm oil is going down for the past 3 years and I think the next guys will be the rubber guys that get a bailout.

Wrong.

4.2 Baht per kilo is around US$125 per metric tonne.

[FloridaExport]

That would mean 1100 US$ compared to 674.00 US$ for the world market price per metric ton or a loss of around 450 US$ per MT.

Palm oil is going down for the past 3 years and I think the next guys will be the rubber guys that get a bailout.

Wrong.

4.2 Baht per kilo is around US$125 per metric tonne.

If you assume that 17% is the volume by weight, then 17% oil content means you need 5882.3 kg of fruit at 4.2 baht per kilogram. (5882.3*0.17 = 1000 kg)

5882 kg of fruit means the price is 24,705 baht per metric ton of oil. That means the government wants to pay about $735 per ton of oil BEFORE it even makes it to the refineries. According to my friend google, the global price of palm oil in April 2015 averaged around $600 per metric ton. You would next have to consider the price of running the refinery and shipping the oil. I fail to see how this is economically feasible, but it is very similar to what the US does with many farm commodities. I also assume my math could be wrong.

Also, a tonne is a metric ton which is 1,000 kg. (thank you Archer)

Edited May 20, 2015 by FloridaExport

[wabothai]

Hasn't he learned any lessons?

[BuaBS]

Just don't put it in my diesel fuel !

[Srikcir]

The average price of fresh palm nuts had dropped to Bt3.60-Bt3.90 per kg while the cost of palm-fruit production is Bt3.38 per kg.

The plummeting price was the result of oversupply of palm fruit in Thailand, Malaysia and Indonesia, while the quality of the oil in the palm nuts has deteriorated due to the drought.

The government’s answer: regulate the price at Bt4.20 per kg. ????????