01/08/2012 (Bangkok Post) - Draft legislation regulating Thailand's palm oil industry covering all parties from upstream to downstream businesses is almost ready, says Krisada Chavananand, chairman of the Federation of Thai Industries' palm oil industry club.

The announcement came after all growers, crushers, cooking-oil producers, biodiesel makers and state officials agreed a law is necessary to manage supply and demand effectively, as the Thai palm oil industry has long suffered from poor management and low yields.

Mr Krisada said the National Palm Oil Policy Committee has proposed the Finance Ministry set aside a 5-million-baht budget to organise a public hearing for palm tree growers, crushers, cooking oil users and biodiesel suppliers.

"We want to hear comments from all parties that engage in the industry in order to develop the industry sustainably over the long term," he said.

Mr Krisada said the state authorities involved in the new palm oil act are those from the Agriculture, Commerce, Finance and Energy ministries.

"We believe if we have a special law governing the palm oil industry, then not only will supply and demand disruptions be solved but higher-priced products will also be addressed," he said, referring to value-added goods such as oleochemicals, skin creams and lotions.

Mr Krisda also noted that in the future, Thailand will need to increase research and development to boost the yield of fresh palm nuts from last year's average of 2.09 tonnes per rai.

He said Malaysia, the world's largest palm oil producer, has had a national palm oil law in place for decades that has lead its industry to sustainable development.

The FTI's palm oil industry club forecast this year's crude palm oil production will drop by almost 15% to 1.6 million tonnes due to a drought in the first half of this year.

In a related development, industry players yesterday announced plans to organise the Palmex Thailand 2012 trade show slated for Krabi province from Aug 30-31.

The event will bring together an international congregation of both upstream and downstream palm oil companies as well as supporting industries to showcase the latest developments in the industry.