02/02/2011 (Bangkok Post) - The government has approved im ports of another 120,000 tonnes of crude palm olien to solve the domestic shortage of palm oil.

The oil must be imported in February and March to prevent any impact on prices of local palm nuts when fresh supplies start entering the market sometime next month, according to the Palm Oil Policy Committee.

"We have authorised the Commerce Ministry to manage the imports and allocate them to all parties fairly, either for consumption or industrial uses,"said Deputy Prime Minister Suthep Thaugsuban, who chairs the committee.

Thailand imported 30,000 tonnes of crude palm olien from Malaysia last month but the volume was still far smaller than domestic demand, while local output and stocks have remained low. The new imports would be from either Malaysia or Indonesia, he said.

As of yesterday, there were about 64,000 tonnes of crude palm oil in stocks, only half of market demand, said Mr Suthep.

Officials of the Public Warehouse Organisation plan to meet with refiners, cooking oil companies and food companies to discuss how to best manage the new imports.

A Commerce Ministry official estimated that out of the 120,000 tonnes of oil to be imported, 30-40% would go to food industries including producers of instant noodles, cheese and sweetened milk.

Local food industries need about 1,800 tonnes of oil per day.

Last year's drought, followed by floods, reduced oil palm production in the South by 15% to about 7.45 million tonnes.