04/11/04 : The Agriculture and Cooperatives Ministry plans to make Krabiprovince a centre for palm oil production under a 25-year plan.

Agricultural economy secretary-general Suthiporn Chirapanda said the planwas aimed at boosting plantations in the South, as well as relatedbusinesses, including oil refineries and cosmetics firms.

Mr Suthiporn said a budget of at least 25 million baht would be needed tofund the construction of an industrial estate in Krabi, which will housethe offices of all relevent business concerns, he said.

The construction of a palm oil refinery in Krabi would support palm oilproduction in the region. At present all palm oil refineries were inBangkok, he said.

Krabi was chosen because it had the largest palm oil plantation in theSouth with around 600,000 rai. It could also be developed as a newdeep-sea export port to Europe, he said.

The ministry wanted to increase palm oil plantations from 2 million rai to10 million rai in 25 years starting in 2004.

It planned to increase 400,000 rai of palm oil plantation every year for25 years to ensure that the market had a constant number of output eachyear in order to solve the price fluctuation of palm oil as well as excessdemand and supply of palm oil.

Twenty-one provinces would be targeted as areas for palm oil plantationincluding 14 southern provinces, six provinces in the East and PrachupKirikhan.

Mr Suthiporn said the ministry would promote palm oil plantations on landwhich were unsuitable for rubbers and other crops such as abandon ricefields.

He said Narathiwat, for example, had more than 100,000 rai of idle landsand abandon fields which could be turned into palm oil plantation.

Mr Suthiporn believed more palm oil plantation would benefit the economyin the South because it generated similar level of incomes to rubber butthe price of palm oil was less fluctuate and required less labour.

An agricultural official in Krabi said it was likely that rubbercultivation would be push upward to the North and Northeast, while theSouth would focus more on palm oil cultivation following this strategy.

The palm oil strategy would be sent to cabinet in May.