The Commerce Ministry plans to ask the cabinet shortly to approve the state-sponsored price guarantee scheme for palm oil farmers for the 2022/23 harvest season, while pledging to support crude palm oil exporters.
According to Commerce Minister Jurin Laksanawisit, after the proposal passed through the committee on integrated area-based management policy chaired by Prime Minister Prayut Chan-o-cha yesterday, the ministry plans to ask for cabinet approval of the palm oil price guarantee scheme, its fourth consecutive year of implementation.
The scheme is forecast to cost 6.44 billion baht this season, and is designed to ensure farmers' income and stabilise prices of domestic oil palm. Under the scheme, the guaranteed price for fresh palm nuts would be set at 4 baht per kilogramme as usual, with a limit of 25 rai of farmland per family.
The price guarantee scheme is scheduled to run until August 2023 and is expected to benefit 380,000 planters.
To be eligible, planters must register with the Agriculture Extension Department, with the money deposited directly into their Bank for Agriculture and Agricultural Cooperatives accounts. Under the programme, farmers are paid the difference when the price falls below the benchmark.
According to Mr Jurin, the ministry also pledged to provide parallel assistance measures to support crude palm oil exporters at 2 baht per kg on the condition that crude palm oil stocks in the country exceed 300,000 tonnes and the domestic price of crude palm oil surpasses the global market price. This support lasts until September 2023.
He said the ministry's recent proposal to the National Energy Policy Committee to adjust the formula of biodiesel from B5 to B7 to promote the use of palm oil in the country has helped to raise domestic palm oil prices. The price of fresh palm nuts is now quoted at 5.50-6.50 baht per kg, which is much higher than the guarantee.
In 2022, fresh oil palm nut production is expected to reach 17.9 million tonnes, an increase of 5% compared with last year's season.
