Firm 'no' to palm-oil price cut

They also believe the price of palm-oil fruit will return to high levels following rising fuel-oil prices.

 Wanporn Martkasem, president of the Palm Oil Refinery Association, said yesterday that cooking oil producers still face losses because of palm-oil

price increases since last year, while retail prices have been controlled by the government.

The retail price is controlled at Bt47.50 per one-litre bottle while palm oil has dropped from its peak of Bt6.70 per kilogram early this year to Bt4.20 now.

However, the association reported its members are still losing as the controlled selling price was based on crude palm oil costs of Bt32 per kilo, but now crude palm oil is Bt34 per kilo.

She added that the costs of manufacturing and transport have also increased in line with increased world fuel prices.

Krisada Chavananand, president of the Palm Oil Crushing Association, said that despite decreasing prices paid to palm-oil farmers this month, the price will soon increase because of high demand but limited palm-oil supply for crushing plants.

The country has 25 palm-oil crushing plants with a full capacity of 17 million tonnes of palm-oil fruit a year, but the domestic market has a limit of 8 million tonnes a year.

In addition, as an urgent measure to solve the palm-oil price drop, Commerce Minister Mingkwan Sangsuwan announced yesterday that all palm-crushing enterprises have confirmed with the ministry that they guarantee to buy fruit at Bt5 per kilo to help farmers.

Krisda said that the buying price of Bt5 per kilo would start soon and continue until the end of this month as the palm-oil price is expected to increase gradually with high demand from both the cooking industry and for biodiesel production.

Thailand 's total production of palm oil is expected to reach 1.34 million tonnes this year. Of this, 67 per cent or 900,000 tonnes is for cooking oil, 26 per cent or 350,000 tonnes is for biodiesel, and the remaining amount is for security stock.