23/02/2011 (The Nation) - The National Oil Palm Policy Committee confirmed yesterday that 33 million litres of cooking palm oil would enter the market within 15 days and the government would make a total subsidy allocation of Bt214 million to the Energy Ministry and producers of cooking palm oil.

The committee is also committed to distribute cooking palm oil to the market within three days. Consumers can purchase as much as they want.

Prime Minister Abhisit Vejjajiva said: "The committee should have a final solution to ease the serious palm-oil shortage as fast as it can. Moreover, the measures should concentrate on transparency." Abhisit said the inspection of the warehouses of producers would have to be worked on.

The prime minister added that the committee would focus more on import quota management, which he has delegated to Deputy Prime Minister Suthep Thaugsuban.

"It may need some subsidy but the total cost should not exceed Bt1 billion," he said.

The solution was agreed on after the Democrat and Bhum Jai Thai parties reached a compromise yesterday, with Commerce Minister Porntiva Nakasai (Bhum Jai Thai) and Energy Minister Wannarat Charnnukul to be the two ministers appointed to the committee.

Porntiva, who has ordered the price of cooking palm oil to be controlled at Bt47 per litre bottle, proposed on Monday for an export ban and liberalisation of imports for three months.

After the four-hour meeting yesterday, Suthep said the committee agreed on three urgent measures to solve the palm-oil crisis:

First, the concerned ministry will directly purchase fresh palm-oil lots (at the oil yield of 17-18 per cent) at the guaranteed price of Bt7 per kilogram. The quantity to be purchased in this period is set at 10,000 tonnes of crude palm oil. The government will start this measure today and will also send an official to inspect the purchase practice.

The government has to subsidise palm-oil crushing mills at Bt9.5 per litre to ensure the price of refined oil will be no higher than Bt44 per litre.

quota unchanged

Second, the Energy Ministry will release from its stock 5,000 tonnes of palm oil that has been stored for producing biodiesel, to refine it for cooking oil. The committee will subsidise the ministry at Bt9.5 per litre.

Third, the controversial import quota of 120,000 tonnes of crude palm oil from Malaysia remains unchanged. However, the committee agreed to divide the import into small lots. The first lot approved was 30,000 tonnes, which can produce 22 million litres of refined oil.

The Public Warehouse Organisation, which is the Commerce Ministry's marketing arm, will handle all import-quota management. The organisation will allocate the imported oil to 10 producers to pack the product and distribute it in the market quickly.

Suthep pointed out that those producers and traders would also get a subsidy of Bt5 per litre. The strategy is to ensure that consumers are able to purchase cooking palm oil at Bt47 per litre bottle.

The total subsidy is estimated to reach Bt214 million.

Suthep said the committee would hold its next meeting on March 8 to consider the situation. The remaining import quota will also be considered, depending on supply and demand.

In addition, the Department of Special Investigation will today submit its report after inspection of 10 producers of cooking palm oil.