15/01/2008 (The Bangkok Post) - The Commerce Ministry yesterday threatened to set a ceiling for retail prices of cooking palm oil if it found traders were hoarding the product.

Siripol Yodmuangcharoen, the ministry's permanent secretary, said authorities were considering setting a retail price ceiling for cooking palm oil, similar to the cap on sugar prices, if the shortage eventually hits consumers.

According to Mr Siripol, the ministry's Internal Trade Department was also instructed to keep a close watch on the prices of 200 product items under the price watch list in its best bid to control the country's inflation within the 3.0-3.5% target range this year.

The ministry yesterday pledged to speed up imports of crude palm oil to address a supply shortage after the latest check found only 82,000 tonnes of crude palm oil left in private warehouses last week, down from 98,000 tonnes in December last year.

Yanyong Phuangrach, director-general of the Internal Trade Department, said yesterday the department would allow imports of 20,000 tonnes in the first lot by the end of this month.

The state-run Public Warehouse Organisation (PWO) would be responsible for importing palm oil, possibly in the form of semi-finished palm oil from Malaysia, and the refinery association would be held responsible for the allocation. In a bid to solve the supply shortage and boost sentiment in the industry, the Commerce Ministry announced last week it would import a total of 60,000 tonnes of crude palm oil, about 20,000 tonnes at a time.

The imports could help to delay a planned second increase in the retail price of cooking palm oil, by 6.50 baht a litre, from 43.50 baht. The price had been increased from 38 baht last month.

Prices of crude palm have been increasing in recent years as demand from biodiesel producers grows. Selling prices are currently 37.50 baht a kilogramme, up from 31 baht in December and 29 baht in November.

The price has been more stable at around 32 baht a kilogramme in Malaysia, the world's largest palm oil producer. Since the beginning of the year, Mr Yanyong said, fuel oil price hikes have prompted biodiesel demand to jump to 20,000 tonnes a month from about 10,000 tonnes a month last year.

However, to make sure the supply shortage was not a result of hoarding by private manufacturers, the Commerce Ministry yesterday formed five teams to conduct blanket nationwide inspections of all stocks of wholesalers and retailers.