PALM OIL SHORTAGE in Thailand!

[Admin]

More cooking palm oil hits markets
By Petchanet Pratruangkrai
The Nation
2011-02-03

About 23 million litres of cooking palm oil has been gradually released since yesterday to the market mainly to modern traders to ease serious shortage. However, consumers still have to limit their purchasing and wait for another 120,000 tonnes of crude oil import.

The survey by the Commerce Ministry yesterday found that more cooking palm oil under 10 different brands are available at five modern traders, which have 60 per cent allocation from 30,000 tonnes of crude palm oil.

About 13.75 million litres of cooking palm oil have been distributed via modern traders, one million litres to fresh market, 2.25 million litres to food retailers and local traders in each province, and 6 million litres to small retailers.

Commerce Minister Porntiva Nakasai said that the ministry will continue allocate cooking palm oil via several distribution channels to ensure adequate supply for consumption. However, the shortage has not been eased yet and need to produce another 120,000 tonnes of import palm oil to the market next month. She said that after the government has approved an import of 150,000 tonnes of crude palm oil, the shortage should be relieved in the next one to two months.

The remaining of 120,000 tonnes of crude palm olein will not only allocate to cooking palm oil producers, but also to industries including soap, instant noodle, and other food producers.

After that the oil palm will be cultivated in the country and more supply will be entered to the market as normal, she said.

However, the ministry found that soybean oil has been shortage in some supermarkets as consumers have shifted to use soybean oil, instead of palm oil, which retail price is comparative.

Supply of soybean oil has been lowered by 30 per cent from normal period. The retail price of soybean oil is quoted at Bt55-60 a litre bottle, higher than the controlled price of Bt46 a litre bottle.

Porntiva said that the ministry will seriously inspect retailers after finding some traders have increased retail price unfairly.

[Admin]

DSI probes cooking oil hoarding
Two major refineries face inspection today
Published: 19/02/2011 at 12:00 AM
Bangkok Post: Newspaper section: News
 
Suspicions of palm oil hoarding have led the Department of Special Investigation to inspect two major refineries in Samut Prakan today.

Initial inquiries have suggested the hoarding of palm oil may be behind the recent national shortage.

The DSI has raised the issue with the Commerce Ministry, which has denied any hoarding has taken place despite palm oil disappearing from many supermarket shelves for months.

DSI chief Tharit Pengdit said the department's probe was approved by the government after palm oil was found for sale at several fresh markets for 67 baht a litre following its absence from supermarkets, despite the Commerce Ministry capping its retail price at 47 baht a litre.

Mr Tharit said the ministry had sought cabinet permission to import two lots of crude palm olein - one of 30,000 tonnes, and another of 120,000 tonnes - to ease the domestic shortage.

The first lot of 30,000 tonnes was distributed to 10 palm oil refineries to produce bottled cooking palm oil. The second lot has yet to be imported.

The DSI suspected some of the 10 refineries might not have refined the imported crude palm oil, instead using it to produce biodiesel which could be sold at higher prices.

Another possibility might be that the factories were hoarding the oil, said Mr Tharit.

A DSI team will today visit two factories in Phra Pradaeng district to check the quotas of crude palm oil each received, the amount of cooking oil each produced and distributed to retail stores, and the amount of palm oil stocks they have left.

The investigation's findings should help determine if any of the refineries could be held responsible for the domestic palm oil shortage, said Mr Tharit.

DSI deputy chief Narat Sawettanan said anybody found guilty of hoarding commodity goods could face a jail term of up to two years and/or a fine of up to 140,000 baht.

"The ministry's Internal Trade Department has insisted it has not found evidence of hoarding by the refineries, but we are not convinced because there is still a severe shortage of palm oil," said Pol Col Narat.

The DSI would invite the Internal Trade Department's representatives to join the investigation. "If evidence of hoarding is found, the DSI will propose the issue as special case," he said.

Prime Minister Abhisit Vejjajiva yesterday said Deputy Prime Minister Suthep Thaugsuban, who chairs the National Oil Palm Policy Committee, and Deputy Prime Minister Trairong Suwannakhiri, who oversees economic affairs, would meet the Commerce Ministry on Tuesday to seek its explanation as to why it had delayed the import of the second lot of crude palm oil. The cabinet had earlier approved the ministry's proposal to bring in 120,000 tonnes of crude palm oil from Malaysia, but the ministry delayed the import.

Mr Suthep challenged the opposition Puea Thai Party to name the politicians it has accused of reaping profits from cooking palm oil.

Puea Thai spokesman Prompong Nopparit claimed yesterday that two government politicians with the initials "S" and "P" had been involved in keeping the commodity off the market.

He proposed Mr Abhisit remove the commerce portfolio from the Bhumjaithai Party and oversee the ministry himself to ease public hardship caused by the rising price of cooking oil.Luecha Ounyuang, chairman of the Palm Tree Planters Association in Surat Thani, blamed the shortage on suppliers hoarding cooking palm oil to cause a rise in prices.

[nookiebear]

Plenty available in Makro Buriram yesterday,,,47 per litre ,limit 3

[Admin]

Coalition set to clash over palm oil crisis
PORNTIVA AGAINST SPEEDING UP IMPORTS
Published: 20/02/2011 at 12:00 AM
Bangkok Post: Newspaper section: News  

Coalition members the Democrats and Bhumjaithai parties are set for a showdown over the palm oil shortage.

Commerce Minister and Bhumjaithai member Porntiva Nakasai yesterday suggested that the rushing through of imports of crude palm oil proposed by the ruling Democrat Party was more for the benefit of certain people than of wider society.

Ms Porntiva's remarks were made in response to Deputy Prime Minister Suthep Thaugsuban's comments on Friday which cast doubt over the ministry's motives in delaying a second import of 120,000 tonnes of crude palm oil to ease the shortage.

A first batch of 30,000 tonnes has already been imported and distributed to 10 palm oil refineries.

Mr Suthep, who chairs the National Oil Palm Policy Committee, also ordered the Department of Special Investigation (DSI) to investigate allegations that four of the refineries had been hoarding palm oil, despite the commerce minister insisting the claims were groundless.

The DSI yesterday asked the ministry's Internal Trade Department to confiscate 1,400 tonnes of crude palm oil from Morakot Industries in Samut Prakan's Phra Pradaeng district after it inspected the factory, saying the company had failed to refine all of the crude oil quota it had received from the Commerce Ministry.

The company received an import quota of 5,000 tonnes of crude palm oil but it has only refined 3,600 tonnes.

Morakot is one of four companies suspected of hoarding palm oil in what is believed to be an attempt to spur an increase in the price of oil.

Ms Porntiva said she would raise the issue with Bhumjaithai on Tuesday when she is expected to receive party approval to challenge the Democrats over its handling of the crisis.

"I will raise the issue at the [Bhumjaithai] meeting on Tuesday," she said.

"When there is a problem, [the Democrats] always heap the blame on us.

"They are politicising the issue when they are supposed to be working to ease the plight."

Ms Porntiva refuted allegations of price manipulation, saying the ministry is tasked with maintaining prices in line with government policy. The palm oil price is capped at 47 baht per litre.

"There are attempts to twist the issue by making accusations about under the table payments," she said.

Ms Porntiva called on Prime Minister Abhisit Vejjajiva and Mr Suthep to clarify why they feel the need to rush the imports through.

"The [Democrats'] move gives me a chance to analyse the links that point to who is involved with this issue," she said.

"We need to find out who it is that the Puea Thai Party has accused of reaping benefits [from the palm oil crisis]."

This was a reference to accusations made by the opposition party, in which they declined to specifically name who they suspected, saying only that they were politicians whose names began with the initials "P" and "S".

Mr Abhisit said he agreed that the DSI should investigate the cryptic allegations.

"It is up to the DSI to investigate. The government does not object to the investigation," he said.

Ms Porntiva said the purpose of stalling the import was to slow down any increase in the price of crude palm oil, which currently stands at about US$1,300 (39,700 baht) per tonne.

To ease hardships caused by the crisis, the Commerce Ministry will propose to the National Oil Palm Policy Committee the import of refined palm oil along with crude oil.

The ministry will also propose a palm price guarantee scheme for farmers under a proposed budget of 7.1 billion baht.

According to Ms Porntiva, the ministry is speeding up the distribution of cooking oil through hypermarkets and convenience stores starting tomorrow.

[Admin]

Govt 'can solve' palm oil crisis
By The Nation
2011-02-21

PM Abhisit says Bt1-billion payment for price freeze cost can be avoided

The government is expected by tomorrow to crack the palm oil crisis without having to spend Bt1 billion to freeze the price, as suggested by the Commerce Ministry.

"I don't think the government needs to spend so much money on the price subsidy," Prime Minister Abhisit Vejjajiva said yesterday.

The palm oil policy committee chaired by Deputy Prime Minister Suthep Thaugsuban, which meets tomorrow, would effectively resolve the shortage of palm oil for cooking, he said. The government has been closely monitoring the supply problem since last year and observed two key factors - soaring global demand and unfavourable weather, which reduced oil palm harvests he said.

After anticipating the shortage, the government gave the green light to import two lots of crude palm oil, he said.

The first lot of 30,000 tonnes has already arrived and been assigned to 10 producers.

"It was found that the [second] order for 120,000 tonnes has not been processed," he said.

Suthep has already been instructed to facilitate the imports of palm oil, he added.

Commerce Minister Porntiva Nakasai defended the delay in the order, saying her ministry and refiners could not agree on the maximum retail price.

The price for a one-litre bottle has been capped at Bt47 while the production cost has surged to Bt41-Bt42, she said.

If the government wants to continue to peg the price, then it has to subsidise about Bt2 a bottle with a total bill of about Bt1 billion, she said.

Without the subsidy, palm oil will likely spike to Bt55-56 per bottle, she said.

The Department of Special Investigation will by Wednesday complete its inquiry into suspected manipulation of production quotas to drive up the price, DSI director-general Tharit Pendit said.

The probe covers the 10 refiners permitted by the Internal Trade Department to produce palm oil at the subsidised price.

Any manufacturers or distributors of palm oil found involved in hoarding will be prosecuted to the fullest extent of the law, he said, adding that the 30,000 tonnes of imported palm oil could not be found in the market.

Pheu Thai Party spokesman Prompong Nopparit said government politicians and businessmen were colluding to create the "artificial" shortage of palm oil.

The DSI should inspect palm oil stocks in Krabi, Surat Thani, Chumphon, Samut Prakan, Samut Sakhon and Samut Songkhram, he said.

Five ships loaded with palm oil were anchored off the coast as if they had an insider's knowledge of pending import orders, he said.

A government figure with the initial "S" was trying to push up the retail price by Bt9 per bottle, he said.

The Thai Oil Palm and Palm Oil Association issued a statement condemning the profiteering campaign.

The supply deficiency should not have happened despite the fact that a new crop of oil palms was entering the market, the statement said.

Even though the Commerce Ministry's Public Warehouse Organisation was slow to execute the import orders, the proposal to allow private importers to supply palm oil would lead to greater market distortion, it said.

The government should allow time for the market to rectify itself, it added.

------------------------------------

Commerce Minister Denies Corruption in Palm Oil Crisis
Tan Network 2011-02-21

The commerce minister has denied being involved in a palm oil hoarding scam, and is calling on the Pheu Thai Party to reveal the names of politicians that it alleged of engaging in fraud.

Commerce Minister Porntiva Nakasai explained that the delay in solving palm oil shortage, saying that the ministry has yet to release seven million bottles of palm oil from the initial 30,000 tons of imports from Malaysia.

She said that the ministry has opened 40 more outlets in department stores and hypermarkets including 15 branches at Tesco Lotus, 13 branches at Big C, 5 branches at Carrefour and 7 branches at Makro, with each selling a daily quota of 4,800 bottles, in order to speed up distribution.

Porntiva added that the ministry has been coordinating with 7-Eleven to sell state-distributed blue-capped bottle palm oil at its outlets, starting.

All of the remaining palm oil imports are expected to be distributed to the outlets by Wednesday.

The minister went on to say that the ministry will continue releasing the initial palm oil imports, while the second import of 120,000 tons is still pending due to concerns over the high price and hoarding attempts to drive the price up.

She said the ministry is negotiating the price with overseas producers so that the palm oil import can be sold at a minimum of 47 baht per bottle.

Meanwhile, the Royal Thai Navy and Customs Department officials are investigating a fleet of freighters near Thai shore, under the suspicion that they may be carrying smuggled palm oil.

Porntiva further stated that the ministry will propose to the national palm oil policy committee at tomorrow's meeting to consider importing purified or bottled palm oil instead of crude palm oil, in order to prevent price collusion and hoarding.

Responding claims by the Pheu Thai Party that two politicians are allegedly involved in a palm oil hoarding scheme, the commerce minister urged the party to give specific names.

She expressed no concern about the recent inspection of palm oil factories by the Department of Special Investigation, and affirmed that major palm oil manufacturers are not hoarding palm oil and suspending their production, as reported by the media.

[Admin]

17/2/2011
Officers and people flock to buy palm oil under Thong Fah program (Transliterates ‘Blue Flag’ in English).

21/2/2011
The 2nd time of selling Palm oil from government.

21/2/2011
Shop selling cooked food (Instant curry) are suffering greatly from Palm Oil shortages.

See full articles + Videos in the News section:
http://www.buriramexpats.com/buriram-news/

[Admin]

'Maintain mandatory reserve stocks' to prevent shortages in Thailand
By Achara Pongvutitham
The Nation 2011-02-28

Buffer stocks would enable quick decision-making for govt and manufacturers

The continued palm-oil shortage has prompted concerned agencies to propose that the government consider compelling manufacturers to maintain a reserve stock to prevent supply problems in the future.

The initiative was floated during a roundtable titled "Palm Oil Crisis: Problems and Solutions" held by Krungthep Turakij last week. Panellists supported the idea, saying it could be accomplished under the Commerce Ministry's price-list law.

Under the proposal, crushing mills, refineries and biodiesel producers would be obliged to adjust their production to maintain a pre-determined supply. Additionally, it would allow government agencies to warn these concerned parties if the stock appeared to be getting too low. All involved would brainstorm to work out the minimum safe stock to support not only household consumption but biodiesel processing.

The existence of such a buffer stock would enable not only companies but the government to make quick decisions on whether to continue production of B3, B5 or B100 diesel or change to a different percentage of biodiesel.

It has been reported that the country's palm-oil stockpile significantly dropped from its normal 120,000 tonnes to an average of 76,929 tonnes last year. In addition, lower-than-expected production of palm fruit pushed up the price of crude palm oil from Bt25.38 per kilogram last July to Bt43.80 in December.

Another concern of the private sector is that the price control by the Internal Trade Department has not reflected real production costs.

Whichai Phochanakij, deputy director-general of the Internal Trade Department, said Deputy Prime Minister Suthep Thaugsuban had raised the idea of managing palm oil like the rubber business to ensure sustainable development in the long run. However, any such revamped system should include biodiesel production, which is an important factor to absorb surplus palm oil.

The Agriculture and Cooperatives Ministry has taken responsibility to draft a law to ensure enforcement. It will focus on import-export, funding, and determining the appropriate buffer-stock quantity, among other factors.

Whichai said concerned government agencies had closely monitored both palm-fruit production and the price of crude palm oil since November. They also hoped that production in January would increase.

"That's why the ministry did not allow producers of cooking palm oil to adjust the price as requested last October. Moreover, we also worry about domino effects to other goods, particularly Mama instant noodles, margarine products and other food-manufacturing industries," Whichai said.

He stressed that it was hard to force manufacturers to bring down prices in line with production costs.

Anusorn Sangnimnuan, president of Bangchak Petroleum, said the government should set up an agency to take responsibility for the palm-oil stockpile. It should help the government closely monitor the situation from upstream to downstream. In addition, it should have the authority to decide when the country is facing a shortage so as to stop exporting or to reduce the grade of biodiesel.

"Bangchak wants to produce only a single grade of biodiesel, as having many grades means higher manufacturing costs and other problems." Anusorn pointed out that stopping production of B3 diesel - that is, fuel with 3-per-cent biodiesel content - would increase the supply of cooking palm oil on the market by 1.2 million litres.

Moreover, the government's price controls focus on the retail price rather than the industrial price, which now is about Bt70 per litre. At that price, manufacturers and biodiesel producers have little difficulty acquiring palm oil, unlike consumers.

"The palm-oil stock needs to be managed to ensure not only enough supply but also a fair price. The government should also focus on utilisation of palm oil for food as its priority, not energy production, as there are other alternative-energy sources," Anusorn said.

In addition, the Finance Ministry should amend the laws concerning biodiesel manufacture to allow more flexibility. This would allow manufacturers to adjust production without facing criminal sanctions, he said.

Wiwan Boonyaprateepart, secretary-general of the Thai Oil Palm and Palm Oil Association, said cooking-oil producers had proposed an increase in the retail price since last October. At that time, 10 major manufacturers warned of a supply shortage due to the rising price of crude palm oil.

"We asked for a Bt2-3 adjustment per litre of bottle but it was not allowed," Wiwan said. The association wanted the price to increase gradually. To cover manufacturing costs, the retail price should be Bt56 per litre.

Wiwan said some manufacturers could shift from price-controlled bottled palm oil to avoid losses. For instance, the price of palm oil contained in plastic bags or cans is not controlled by the department.

"We should consider having floor and ceiling prices, which may be a complicated process but we should be planning for [the whole supply chain] rather than focusing only on the consumer," Wiwan said.

Sudarat Techasriprasert, a palm-oil expert from the Office of Agricultural Economics, said it had closely monitored palm-oil production since last year, now checking the situation almost daily. The office has also provided production forecasts every three months. However, there are many unpredictable factors such as climate change, floods, drought, and insect infestations.

Such problems last year affected not only production of oil palm but also of coconut and soybean seed.

Although Sudarat agreed with other panellists on the need for an enforced stockpile, she warned that European experts hired by her office to help study the pros and cons of such a buffer had pointed out that it would entail costs for crushing mills that might force government subsidy.

Suphsorn Chayovan, managing director of TS Oil Industry, said stock management was the key factor of the current palm-oil crisis, which relied mostly on production forecasts. The establishment of a buffer stock and management would help prevent shortages in the future.

"As a new manufacturer of cooking palm oil, we cannot build up a huge stockpile and cannot compete with existing manufacturers as we look for consistent supply," he said.

[Admin]

Police ordered to nab palm oil cheats
By The Nation
2011-03-05

Police across the country have been instructed to make immediate arrests of retail vendors who sell palm oil at prices higher than Bt47 a bottle.

The urgent order was issued via video conferencing to all police headquarters by Pol General Phongsaphat Phongjaroen, who heads a taskforce tackling hoarding and overpricing of palm oil.

He made no mention of action against wholesale vendors selling palm oil at already inflated prices to retail vendors.

"At whatever price retail vendors buy palm oil, selling it at prices higher than Bt47 a bottle is a crime," he later told a news conference.

"It is unfair that retail vendors who buy palm oil at a price higher than Bt47 have to sell it for no more than that, but consumers don't want palm oil to be more expensive that Bt47 a bottle," he said.

[nookiebear]

It selling on Nong Ki market for 57/litre

[Admin]

14/3/2011

Agricultural Cooperatives brought palm oil to sell to alleviate the affliction of their members.

Read full article + Video in the News section:
http://www.buriramexpats.com/buriram-news/

[nico]

Could this be related to prices...

SINGAPORE - Finland's top refiner Neste Oil will formally open its Singapore biodiesel plant, the world's largest, next week, even as the outlook for the renewable fuel remains bleak amidst soaring feedstock prices and uncertain regional demand.

The Singapore plant, which cost 550 million euros (S$967.9 million) and has an annual capacity of 800,000 tonnes, started production in November. It uses palm oil, palm oil products and animal fat as feedstocks.

Biodiesel producers are facing an uphill battle with rising palm oil prices, Chris De Lavigne, vice president of Industrial Practices at Frost & Sullivan, said

[nookiebear]

No doubt it is....but here I havent seen any bio diesel for at least a month