Thai government to import palm oil

Jan 12, 2008, 1:40 GMT

Bangkok - Thailand plans to import 60,000 tons of palm oil this month, either from Malaysia or Indonesia, to ease a domestic shortage of the commodity, which is used both for cooking oil and as bio-fuel, news reports said Saturday.

Yangyong Phuangrach, director-general of the Internal Trade Department, said the imports were necessary as a short-term measure to ease a domestic shortage, The Nation newspaper reported.

Thailand, a significant palm-oil producer, tries to keep a stockpile of 150,000 tons of palm oil to secure domestic supplies and keep prices down, but the stockpile has fallen to 98,000 tons.

The country uses about 70,000 tons of palm oil a month for cooking oil and another 30,000 tons for bio-diesel fuel.

It is not clear whether the shortfall has been caused by hoarding among suppliers, in an effort to boost local cooking-oil prices.

'Following the imports, the ministry will not allow any palm-oil manufacturers to increase prices further,' said Yangyong.

Under the ASEAN Free Trade Agreement (AFTA), palm-oil imports are still subject to a 20-per-cent import tax, while most other commodities face tariffs of zero to 5 per cent.

The Association of South-East Asian Nations includes Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam.