Rising Energy Prices Boost Palm Oil Demand in Energy Sector, Pushing Prices Above 7 Baht
Global energy demand is driving increased use of crude palm oil for biodiesel production, pushing Thai palm prices above 7 baht per kilogram as the government promotes B20 fuel to strengthen energy security.
The Department of Internal Trade visited palm oil farmers to reaffirm that exports remain operational and to encourage increased B20 biodiesel usage, supporting palm prices that have adjusted to 6.80-7.20 baht per kilogram, with farmers confident the situation is improving.
Department Director Wittayakorn Maniyanet revealed that palm oil farmers from central Thailand's Saraburi and Pathum Thani provinces had submitted a letter to the Commerce Ministry expressing concerns about palm oil prices and export conditions. Following Deputy Prime Minister and Commerce Minister Supachee Sutheppundit's directive, the department is closely monitoring and urgently addressing the issue.
Today, the department visited palm oil farmers in Saraburi and Pathum Thani provinces to meet with Manas Phuttarat, chairman of the Thai Palm Oil Farmers Association, mill operators, and local farmers to directly hear their situation and proposals.
The ministry is continuously monitoring the entire palm oil system and managing balance across inventory, domestic consumption, and exports to ensure fair market prices for all parties. Regarding farmers' export concerns, the department confirmed that palm oil exports continue normally under appropriate stock management. Since April 7, 2026, 11 exporters have been approved for shipments totaling over 200,000 tons, maintaining manageable levels.
"Rising global energy prices have increased demand for crude palm oil in the energy sector. The government promotes biodiesel use to reduce diesel imports and strengthen energy security," the director stated.
Monthly demand for crude palm oil for biodiesel production now exceeds 100,000 tons, with over 200 B20 fuel service stations established nationwide. Government policy prices B20 below B7 to encourage usage, clearly boosting domestic crude palm oil demand and supporting current palm prices.
Wittayakorn noted that palm prices have recently adjusted upward to 6.80-7.20 baht per kilogram, up from the previous week's 6.60-7.00 baht range, reflecting improved market direction from both domestic and global demand.
During the field visit, the department checked oil palm purchasing conditions at mills, including Somtong Group Company Limited (Public), which confirmed normal operations at full capacity with no queuing issues, as harvest gradually reaches market without concentrated buildup like previous years.
The department emphasized mills should purchase palm based on quality and oil content to treat farmers fairly and incentivize quality improvement, particularly harvesting ripe fruit with high oil content, to elevate Thailand's long-term palm oil standards.
Manas Phuttarat reported that farmers are currently satisfied with improving prices and this season's purchasing situation is better than last year, with no palm fruit spoilage at mills. He requested continued government oversight to ensure fair treatment and noted farmers are pleased with continuously improving prices.
