The National Palm Oil Policy Committee has agreed to import 30,000 tonnes of crude palm olein (CPO) to solve supply issues that could lead to price increases for the cooking product.
The import will be finished by the end of next month to buffer against price impacts to local palm nuts.
The committee, which is chaired by Deputy Prime Minister Kittiratt Na-Ranong, has about-faced on the matter. Two months ago, he scrapped the scheme under pressure from the private sector.
"The fresh decision is aimed at preventing any possible shortage, as current stock has declined to 130,000 tonnes, a critical level," said Apichart Jongskul, secretary-general of the Office of Agricultural Economics.
A thin supply could affect the price of cooking palm oil, which is capped at 42 baht a litre.
The 30,000-tonne shipment will boost local stocks to 160,000 tonnes of CPO, far short of the safety level of 200,000 tonnes.
Mr Apichart said the committee will seek cabinet approval next week, authorising the state-run Public Warehouse Organisation to import oil within a month to avoid externalities in the palm nut market.
Some 800,000 to 900,000 tonnes of fresh nuts will be harvested throughout August and September, he said.
Wiwan Boonyaprateeprat, secretary-general of Thai Oil Palm and Palm Oil Association, said private sector planters and oil extraction manufacturers support the import plan now due to the weak domestic supply.
As well, weak demand globally will enable Thailand to capitalise on lower palm costs and discourage oil exports.
CPO costs 30 baht a litre in Malaysia, four baht less than in Thailand.
However, Ms Wiwan called on the government to outline a longer-term strategy to manage the industry.
It would be wise, she said, for the government to bear in mind that cultivation patterns for the product have shifted recently due to the impact from climate change.
"Normally, the peak harvesting period is June, but this year it is not, it's to August," said Ms Wiwan.
She said drought and altering weather patterns have also disrupted production in Malaysia and Indonesia, two other big players in the palm oil game.
Meanwhile, Mr Apichart said the committee yesterday considered possibilities to prohibit exports of CPO to ensure a supply build-up.
Further measures against a supply shock have been taken by the Energy Ministry, which will alter its biodiesel policy to conserve cooking oil during the low season.
