Thailand’s state-owned oil and gas company PTT Plc has agreed to buy 100,000 tonnes of crude palm oil (CPO) to produce biodiesel for export in a move to shore up prices and use up surplus stock, the Bangkok Post reported on 14 March.
The government initiative was being introduced to use 400,000 tonnes of existing CPO stock. Thailand normally maintained a CPO stock of 250,000 tonnes/year and the Commerce Ministry had estimated that some 3M tonnes of CPO would hit the market this year, up from 2.5M tonnes in 2018, the report said.
Last year's volume had left a surplus of 500,000 tonnes and the government had increased the methyl ester content of biodiesel to 20% or B20, as well as using CPO to generate electricity.
Jariya Sutthichaiya, secretary general of the Office of Agricultural Economics said the National Oil Palm Policy Committee had also authorised the Electricity Generating Authority of Thailand (Egat) to increase the use of CPO for power generation at the Bang Pakong plant to 1,500 tonnes/ month, up from 1,000 tonnes/month.
Previously, Egat had agreed to absorb 160,000 tonnes of CPO for power generation, the Bangkok Post wrote.
Sutthichaiya said the excess CPO stock was expected to be disposed of by May this year.
The report said fresh palm nuts sold for 2.40 baht/kg and the government was expecting a price increase 3 baht/kg in May. Fresh palm nut production was forecast at 16.7M tonnes this year, up 8% from 15M tonnes in 2018.