The Palm Oil Price Tends to Drop in Thailand
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The Bureau of Agricultural Economics, Research of Thailand, reveals that the price of Palm Oil in the world market will likely decrease due to the global production increase in 2023. Resulting in a decrease in Thai prices, plus exports tend to fall, causing the stock of Palm Oil in the country to increase, expecting an average price of 6.1 baht per kilogram in 2023, down from 7.7 baht per kilogram in 2022.
The factor that caused the global Palm Oil price to decline in 2023 is Palm Oil production of 75.93 million tons in 2021/2022, an increase of 3.9 percent from 73.08 million tons in 2020/2021. Indonesia produced 45.30 million tons of Palm Oil, a 4.1% increase from 43.50 million tons in 2020/21. Malaysia produced 18.15 million tons of Palm Oil, a 1.7% increase from 17.85 million tons in 2020/21. It accounted for 83.5% of world Palm Oil production. As for Thailand, it is the world’s third-largest producer, capable of producing 3.15 million tons, accounting for 4.2 percent of world Palm Oil production.
The amount of Oil Palm in Thailand will increase, while exports tend to decrease. This will increase Palm Oil stocks. However, the increasing demand for Palm Oil in both the consumer and energy sectors is still a factor supporting the price of Palm Oil and Palm fruit in 2023 at a high level. The Palm Oil is at 34 baht per kilogram and resulting in the average price of Palm Oil that farmers sell at 6.1 baht per kilogram.
This year, Thailand’s production situation is expected that there will be 6.20 million rai of fruitful area, 18.98 million tons of yield, and 3,059 kilograms of yield per rai, an increase from 6.2 million rai of productive area, 18.42 million tons of yield and 2,994 kilograms of yield per rai in 2022, representing 0.8 percent, 3 percent, and 2 percent, respectively. In 2022 the price of Palm Oil was quite good. It was causing farmers to change wasteland or switch from growing other crops to planting Palm Oil. It also incentivizes farmers to take care of Oil Palm plantations, resulting in higher productivity and productivity per rai.
The demand for domestic and international crude Palm Oil (CPO) has an upward trend. 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 market. The Thai Biodiesel Producers Association wants to formulate the correct Palm Oil price structure formula together with all parties and asked to consider pushing for the use of biodiesel B10.
Palm Oil Trade in Thailand
In 2021, Thailand exported Palm Oil worth $697 million, making it the world’s 6th largest exporter of Palm Oil. In the same year, Palm Oil was Thailand’s 88th most exported product. The leading destination of Palm Oil exports from Thailand is India ($597 million), Burma ($47.1 million), Kenya ($35.4 million), Cambodia ($5.29 million), and Laos ($4.8 million).
In 2021, Thailand imported Palm Oil worth $15.6 million, becoming the world’s 112th most significant importer of Palm Oil. In the same year, Palm Oil was Thailand’s 733rd most imported product. Thailand imports Palm Oil primarily from: Malaysia ($15 million), Indonesia ($352k), and the United States ($169k).
Other sources: BANGKOK POST
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