Univanich Palm Oil (2)

Industry Overview

 

Oil palm was first planted in Thailand circa 1969 with Univanich as a pioneer in Krabi province. Since then the oil palm industry has developed into one of the major economic forces.

The pace of the growth was further accelerated in the past decade thanks to the first National Alternative Energy Development 2004-2011 and second Alternative Energy Development Plan 2008-2022 which promotes the use of biodiesel derived from crude palm oil. The latest plan calls for a mandatory production of B2 biodiesel and voluntary production of B5 biodiesel from 2008-2010. It indicates that from 2011 onward, B5 biodiesel production will be a compulsory and B10 biodiesel production would be available as an alternative. It forecast that B100 demand would be 3.02 million litres/day (ml/d) in 2011, rising to 3.64 ml/d and 4.50 ml/d over the period of 2012-2016 and 2017-2022 respectively. That equates to the annual CPO production of roughly 1,100 and 1,640 million tonne required just for the biodiesel sector alone in 2012 and 2017 respectively.

Although over the past 10 years, oil palm plantation area rose almost two folds and palm oil production increased sharply, the growth rate was subdued and increase in production to meet rising demand from biodiesel sector becomes more challenging in the past few years.

At the end of 2010, total harvested area for oil palm was approximately 3.55 million rai, a 10.36% increase over the past 5 years. Over the same period, total FFB produced rose from 6.715 million tonne to 8.223 million tonne, albeit crop yield per rai declined from 2,828 kg/rai in 2006 to 2,315 kg/ rai in 2010. And total crude palm oil production was stagnant at around 1,100 – 1,300 million tonne per year, far short of planned quantity required to produce 3 ml/day of B100 in 2011. The slow growth and low productivity are as a result of:

-          Strong rubber price encouraging farmers to favour planting rubber over oil palm.

-          Lack of suitable land for palm plantation. Land is too expensive.

-          Irregular weather pattern adversely affected palm yields.

Table below summarises key statistics of palm oil industry in Thailand over the past 5 years.

ThailandStatistics	2006	2007	2008	2009	2010
Plantation Area (million rai)	2,954	3,197	3,676	3,889	4,077
Harvested Area (thousand rai)	2,374	2,663	2,885	3,187	3,552
FFB Production (thousand tonne)	6,715	6,390	9,271	8,163	8,223
Yield per rai (kg/rai)	2,828	2,399	3,214	2,560	2,315
CPO Supply (thousand tonne)	n/a	1,207	1,661	1,453	1,425
- CPO Production	1,167	1,051	1,544	1,345	1,288
- Opening Stock	n/a	156	89	108	137
- Import Crude Palm Olein	n/a	0	28	0	0
CPO Demand (thousand tonne)	n/a	1,207	1,661	1,453	1,425
- Local Consumption	n/a	834	846	739	734
- Export Refined Palm Oil	n/a	60	92	59	60
- Export Crude Palm Oil	n/a	224	285	67	63
- Biodiesel	n/a	0	330	450	500
- Ending Stock	n/a	89	108	138	68

Sources: Office of Agricultural Economics and Univanich

Office of Agricultural Economics forecast that the harvested area will increase to 3.75 million rai in 2011. Total FFB harvested and CPO produced in 2011 would be 9.12 million tonne and 1.47 million tonne respectively.

 

Advertisement