09/06/2011 (Isria) - Mr. Suthep Thaugsuban, Deputy Prime Minister, chaired the meeting of the National Palm Oil Policy Committee then gave a briefing on the result of the meeting. Gist as follows:

The meeting discussed progress made based on resolution of the National Palm Oil Policy Committee on 30 March 2011 and 27 April 2011, which was sent to the Cabinet for approval. The Government considers it policy that refineries buy palm oil from oil palm mills at a price of Baht 36.28 per kg from 10 April – 30 June 2011. The mills purchase it from farmers for 6 baht per kg at minimum quality rate of 17%. Refined oil is sold to consumers for no more than 47 baht per liter and the government will subsidize the oil refinery 1.79 baht per liter of. The oil leftover should be used to produce biodiesels whereby companies that produces biodiesel can buy crude palm oil at 36.28 baht per kilogram.

Deputy Prime Minister said at the meeting today that the government has considered implementing this policy. The Chairman of the Audit Committee is reviewing the implementation of the policy while the Office of Agricultural Economics has visited various provinces to see such operations taking place. It has listened to concerns raised especially in the provinces of Chumphon, Surat Thani, Krabi, which concluded that the government agencies’ and operations must be integrated and better coordinated. Despite the early obstacles due to legal matters encountered by government agencies, at present all parties are agree that integrating is the key to success and will benefit the public. This project is considered a pilot project.

Deputy Prime Minister said of the agreement made by the National Palm Oil Policy Committee regarding the purchase of palm oil by refineries did cause some problem as farmers were not familiar with such policy. In addition, productivity has declined. However when the provincial governor held meetings with the relevant authorities to set out measures to maintain quality and performance, it was concluded that both farmers and factories accept the said system. This turned out to be beneficial for the country's palm oil production as a whole. The quality and quantity of production increased more 70%. In some areas, farmers were able to produce better quality products by 17% to 18.5%. Yet, a problem remains over how to fix is ​​to have a two-price system. The National Palm Oil Policy Committee confirmed that the system must provide for a singular and price it instructed the Ministry of Energy to look into how to resolve this issue including adjusting the number of purchased crude oil from refinery so that amount of oil leftover can be produced into biodiesel. In addition, it should also control the price of oil prices in accordance with the resolution pf the National Palm Oil Policy at 30.28 baht per kg and asked the provincial governors of each provinces the how this product is traded on the market from the moment it’s purchased at the mill until it’s sold to the refinery. The Committee also assigned the Ministry of Energy look into the contract with the mill to ensure that it has complied with government policy.

In any case, the Board of Directors of the National Palm Oil Policy Committee hold a be meeting in the next 10 days review this issue in order to come up measures by 30 June 2011.