AreaThailand

Commodity GroupOilseeds, oils and meals

CommodityPalm oil

Date01/12/2017

Policy CategoryConsumption and marketing

Policy InstrumentMarket regulation

DescriptionImplemented measures aimed at stabilizing domestic palm oil supplies and prices, thus protecting growers\' incomes. The new measures focused on encouraging palm oil uptake by the country\'s energy sector and exploring new export opportunities.

NotesReportedly, towards the end of last year, Thailand’s inventories of crude palm oil have swollen to half a million tonnes, causing prices for fresh palm fruit to slide below THB 3.50 per kg – compared to price levels of THB 5.0 in June last year (respectively, USD 110 and 157 per tonne). In a bid to protect growers’ incomes, the Government plans to i) foster the uptake of crude palm oil by the country’s energy sector, and ii) seek new export opportunities within Asia, notably in China and India. The domestic target price for fresh palm fruit has been set at THB 4.00 per kg, which compares to production costs of about THB 3.80 per kg (USD 125 and 119 per tonne, respectively). Similar measures have been implemented in past years, especially during the rainy season, when high domestic palm oil output tends to depress farm gate prices (see MPPU Apr.’16 & July’17). The Thai Government regularly holds consultations with farmer representatives, processors and consumers to coordinate measures to stabilize domestic palm oil supplies and prices.