MARKET DEVELOPMENT
Thailand Says Will Buy Up To 100,000 Tonnes of Crude Palm Oil
Thailand Says Will Buy Up To 100,000 Tonnes of Crude Palm Oil
17/03/2016 (Reuters) - Thailand will buy up to 100,000 tonnes of crude palm oil (CPO) if palm fruit prices drop below a certain level, a government official said on Wednesday, amid slowing global demand for the commodity.
Thailand's National Palm Oil Policy Committee on Wednesday approved the plan to support farmers, said Kanit Likhitvidhayavuth, a deputy director general of the Agriculture Ministry's Department of Agriculture Extension.
The purchases will occur if prices for FFB (fresh fruit batch) palm fall below 4.20 baht ($0.12) per kg, then the government will buy CPO at 26.20 baht ($0.75) per kg from extracting firms, said Kanit.
"This is for when problems arise in the future and there is an oversupply of palm in the market," he told reporters.
Thai FFB prices were quoted at 4.70 baht ($0.13) per kg and CPO prices at 29.75 baht ($0.85) per kg on Tuesday, commerce ministry data showed.
Benchmark Malaysian palm oil futures suffered their steepest drop in two weeks on Wednesday, tracking declines in rival vegetable oils and feeling the pressure of slowing demand from top buyers China and India.
Thailand, the world's third-largest producer of the commodity, enacted a similar measure in 2015 when the commerce ministry bought 2,600 tonnes of crude palm oil.
Dry weather conditions brought by the El Nino weather pattern has curbed palm output in Southeast Asia, including in major producers Indonesia and Malaysia.
Thailand expects to produce about 200,000 tonnes of crude palm oil during the upcoming April to June harvest.
Thailand has about 200,000 tonnes of palm in its stockpiles, said Chutima Bunyapraphasara, permanent secretary of the commerce ministry.
The inventories are enough for domestic consumption and there was no need for Thailand to import palm oil, she said. ($1 = 35.0400 baht)
Thailand's National Palm Oil Policy Committee on Wednesday approved the plan to support farmers, said Kanit Likhitvidhayavuth, a deputy director general of the Agriculture Ministry's Department of Agriculture Extension.
The purchases will occur if prices for FFB (fresh fruit batch) palm fall below 4.20 baht ($0.12) per kg, then the government will buy CPO at 26.20 baht ($0.75) per kg from extracting firms, said Kanit.
"This is for when problems arise in the future and there is an oversupply of palm in the market," he told reporters.
Thai FFB prices were quoted at 4.70 baht ($0.13) per kg and CPO prices at 29.75 baht ($0.85) per kg on Tuesday, commerce ministry data showed.
Benchmark Malaysian palm oil futures suffered their steepest drop in two weeks on Wednesday, tracking declines in rival vegetable oils and feeling the pressure of slowing demand from top buyers China and India.
Thailand, the world's third-largest producer of the commodity, enacted a similar measure in 2015 when the commerce ministry bought 2,600 tonnes of crude palm oil.
Dry weather conditions brought by the El Nino weather pattern has curbed palm output in Southeast Asia, including in major producers Indonesia and Malaysia.
Thailand expects to produce about 200,000 tonnes of crude palm oil during the upcoming April to June harvest.
Thailand has about 200,000 tonnes of palm in its stockpiles, said Chutima Bunyapraphasara, permanent secretary of the commerce ministry.
The inventories are enough for domestic consumption and there was no need for Thailand to import palm oil, she said. ($1 = 35.0400 baht)