Thailand Palm Oil: Phuket – South India Route Takes 4-5 Days  


Jun 19, 2023 | Agricultural Markets News

Reading time: 2 minutes

Thailand’s crude Palm Oil exports may reach 1 million tons this year, up from 919,000 tons last year, driven by a higher Oil Palm supply and strong demand from India and China, according to the Commerce Ministry. Wattanasak Sur-iam, Director-general of the Internal Trade Department, said the ministry plans to increase crude Palm Oil exports this year as much as possible to maintain the stability of prices in the domestic estimates new Palm nut production at 18.9 million tons this year, up 3% from 18.4 million in the 2022 season, with crude Palm supply increasing to 3.15 million tons for domestic consumption and export, up from 3.14 million tons last year. Oil Palm plantation areas are estimated at 6.2 million rai this year, up from 6.15 million rai in 2022.

According to the report, relatively reasonable prices in 2022 encouraged farmers to convert their unused land or change to growing Oil Palm from other crops. Crude Palm Oil exports rose 57% last year to 919,000 tons, with the value increasing by 90% to 45 billion baht. India was Thailand’s primary export market, followed by China. India consumes up to 8 million tons of crude Palm Oil a year.

Given the abundant supply, Mr. Wattanasak said the department might propose the Government adjust the country’s safety stock requirement for crude Palm Oil to 250,000 tons, down from the average level of 300,000 tons.

India-Thailand Palm Oil Trade

Thailand today has emerged as an essential supplier of CPO to India. Another reason India increases imports is that Bangkok does not levy export duty on Palm Oil exports, unlike Indonesia and Malaysia.

Though Indonesia and Malaysia remain major Palm Oil suppliers to India, Thailand’s share has risen to 11.65 percent during the Oil year 2021-22 (November to October) from 1.37 percent in 2019-20. Thailand’s share has increased to 15.24 percent in the first six months of the Oil year 2022-23. Data from India’s Solvent Extractors’ Association (SEA) shows that Thailand’s Palm Oil exports were at 90,998 tons in 2019-20, which increased to 6.98 lakh tons (lt) in 2021-22. India imported 5.73 lt of Palm Oil in the first six months of 2022-23.

Sudhakar Desai, President of the Indian Vegetable Oil Producers’ Association (IVPA), said that Thailand had helped meet Indian demand when Indonesia had banned Palm Oil exports. Thailand has emerged as a natural supplier of Oil Palm to India. However, Thailand’s production does not match the scale of either Indonesia or Malaysia.

While Palm Oil production in Thailand would continue to grow, it would continue to be the third largest Oil Palm producer. “I am told production is consistently increasing in that country,” he said, adding it is suitable for India to de-risk from its dependence on Malaysia and Indonesia. Unlike Indonesia, Thailand is more interested in sending CPOs to India, Desai said.

Highlighting the logistical advantage of exporting from Thailand, BV Mehta, Executive Director of SEA of India, said a voyage from Phuket to any southern port in India is hardly 4-5 days, while it is around 10-12 days from Indonesia and Malaysia.

Though Thailand does not impose any export duty or levy on Palm Oil, unlike Indonesia, its production is limited to around 3.5 mt. Domestic consumption is around 1.3 mt, and about 1.2 mt is used for bio-diesel blending. With this, Thailand is left with about 1 mt for export.

Asked if there is scope for India to bargain for more Palm Oil from Thailand, Mehta said the country has limited quantities to sell. It is not a significant producer but has a million tons surplus. India has already bought it this year, he said.

Other sources: BANGKOK POST

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