09/09/2011 (Bangkok Post) - Legislation to regulate the country's palm oil industry is being pushed to ensure more sustainable development and stable prices.

Growers, crushers, cooking oil producers, biodiesel makers and state officials agree that a law is necessary to manage supply and demand effectively.

Krisada Chavanand, chairman of the Palm Oil Industry Club of the Federation of Thai Industries, said the industry had suffered from poor management and low yields.

While oil palm growing is on the rise, growers have been frequently deceived into buying infertile kernels and there are no rules to punish the perpetrators.

"Last year, the boom led to a shortage that drove cooking palm oil to surge to 50 baht a litre," said Mr Krisada.

The government stepped in but its solution was short-term: to suspend production of biodiesel to provide more supply for the cooking oil industry.

Palm production was also low, a major impediment if the country is to become a regional leader in the biodiesel industry.

The Office of Agricultural Economics, the agency responsible for crop production plans, will be intimately involved in crafting the legislation.

Apichart Jongskul, the secretary-general of the office, said a committee would be set up to study laws that regulate cash crops such as sugarcane and rubber.

Wiwan Boonyaprateeprat, secretary-general of the Thai Oil Palm and Palm Association, suggested the industry focus on longer-term strategy to improve yields.

She said Thai palm fruit yields averaged three tonnes per rai per year, compared with more than five tonnes in Malaysia. The price of cooking oil is controlled by the Commerce Ministry at 42 baht per bottle.

Although the government set up the Thai National Palm Oil Board in 2008, development was slow with little coordination among members, she said.

In another development, the Department of Energy Business will keep the biodiesel formula at 4% methyl ester blended with diesel (B4) until the end of October to absorb a crude palm oil surplus of 40,000 tonnes per month.