LOGO Thai Palm Oil Industryand

Roadmap for Implementation of Strategic Agricultural CropsRoadmap for Implementation of Strategic Agricultural Crops

Palmax Thailand 2015 Palmax Thailand 2015 20 August 2015

Office of Agricultural Economics

OutlinesOutlines

Oil Palm Situation and Trend- World- Thailand

Thailand Palm Oil Industrial Structure Thailand Palm Oil Industrial Structure - Problems and Constraints

Oil Palm and Palm Oil Industries Development Strategy2015-2026

LOGO

Oil Palm Situation and TrendOil Palm Situation and Trend

World Oil Palm Situation and TrendWorld Oil Palm Situation and TrendGrowth Rate 7.02%

70 00

ปริมาณการผลตินาํมนัปาล์มโลก ปี 48-57 (หน่วย : ล้านตัน) Palm oil world : Production 2005-2014 (M. ton) Production 2015

61.45 M. ton3.63% 

41 0844.02  46.04 

48.84 52.11 

55.97 59.30 

50.00 

60.00 

70.00 

Indonesia 53.70%Malaysia 32.22%

38.56% 33.53 

35.83  37.33  41.08 

20.00 

30.00 

40.00  Thai

Malaysia

Indonesia

Total

Thailand 3.42%52.28% 

‐

10.00 

2548 2549 2550 2551 2552 2553 2554 2555 2556 2557

Growth Rate 6.83%D ti 201556.98  60.00 35.00 

ปริมาณการบริโภคนํามันปาล์มโลก ปี 48-57 (หน่วย : ล้านตัน) Palm oil world : Domestic consumption 2005-2014 (M. ton) Domestic con. 2015

60.82 M. tonIndonesia 16 47%11 20%

10.80% 

32 4834.97 

36.12  39.32 42.71 

45.13  47.14  49.92 

54.49 

40.00 

50.00 

25.00 

30.00 

EU. Indonesia 16.47%India 14.96%EU 10 93%

14.65% 

11.20% 32.48 

20.00 

30.00 

10.00 

15.00 

20.00  China

India

Indonesia

Total EU. 10.93%China 9.01%17.16%

‐

10.00 

‐

5.00 

2548 2549 2550 2551 2552 2553 2554 2555 2556 2557

Total

World Oil Palm Situation and Trendปริมาณการส่งออกนาํมนัปาล์มโลก ปี 48-57 (หน่วย : ล้านตัน)

World Oil Palm Situation and TrendPalm oil world : Export 2005-2014 (M. ton) Growth Rate 7.00%

1.51% 32.31 

34.93  35.51 37.46 

40.07 43.42  42.37 

35.00 

40.00 

45.00 

50.00 

GR. = 7.00% Export 201544.20 M. ton

40.83% 24.55 

27.21  27.56 

15.00 

20.00 

25.00 

30.00  Thai

Malaysia

Indonesia

Total

Indonesia 52.04%Malaysia 38.91%

48.14% 

‐

5.00 

10.00 

2548 2549 2550 2551 2552 2553 2554 2555 2556 25572005 2006 2007 2008 2009 2010 2011 2012 2013 2014

Thailand 0.18%

40 6845.00 30.00 

ปริมาณการนําเข้านาํมนัปาล์มโลก ปี 48-57 (หน่วย : ล้านตัน) Palm oil world : Import 2005-2014 (M. ton) Growth Rate 7.00%I t 2015

5.52% 

26.4526.70 

30.29 

34.06  35.21 36.49 

38.99 41.82  40.68 

30.00 

35.00 

40.00 

20.00 

25.00 

Pakistan

GR. = 6.83% Import 201543.14 M. ton

India 20 86%15.49%

15.24% 23.94 26.45 

10 00

15.00 

20.00 

25.00 

10.00 

15.00 EU.

China

India

Total

India 20.86%EU. 15.76%

China 12 59%19.66% 

‐

5.00 

10.00 

‐

5.00 

2548 2549 2550 2551 2552 2553 2554 2555 2556 2557

Total

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

China 12.59%Pakistan 6.26%

World Oil Palm Situation and Trend World Oil Palm Situation and Trend

Palm oil world : Ending Stock 2005-2014 (M. ton) Growth Rate 10.57%Ending Stock 2015

7.35 M. tonM l i 28 98%Malaysia 28.98%Indonesia 23.81%

I di 8 30% India 8.30%Other 38.91%

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

Expansion of Production and Demand19831983 19931993 20020033

Expansion of Production and Demand

Items/YearItems/Year19831983

(( 30 30 years. ago)years. ago)19931993

(( 20 20 years. ago)years. ago)20020033

(( 10 10 years. ago)years. ago) 20132013

Planting area Planting area ((M. ha M. ha )) 00..0606 00..1616 00..3030 00..721721

Palm Oil Production Palm Oil Production ((M t CPO )M t CPO ) 00..0505 00..3131 00..7474 22..135135((M. ton CPO.)M. ton CPO.)

DomesticDomestic ConsumptionConsumption 00 0505 00 2929 00 6868 11 730730((M. ton CPO.)M. ton CPO.) 00..0505 00..2929 00..6868 11..730730

ExportExport((M ton CPO )M ton CPO )ExportExport((M. ton CPO.)M. ton CPO.)((M. ton CPO.)M. ton CPO.) -- 00..001001 00..3030 00..565565

Production Areas and Yield 2010-2015Year Planting Harvested Production YieldYear Area (M. ha) Area (M. ha) FFB. (M. ton) (ton/ha)2010 0 62 0 54 8 23 15 192010 0.62 0.54 8.23 15.192011 0.66 0.57 10.76 18.892012 0.71 0.59 11.31 19.102013 0.72 0.60 12.37 20.512014 0 73 0 66 12 50 18 832014 0.73 0.66 12.50 18.83GR. 4.41 4.82 10.24 5.25

2015 (F) 0.71 0.70 12.21 17.34

H t d A i Th il d 2015 (0 70 M h )Northeastern Area

2%Northern Area

Harvested Area in Thailand 2015 (0.70 M. ha)

Central Area

2% 1%

10%

Province Harvested Area (M. ha)

Southern Area87%

Total 0.704 1. Suratthani 0.162 2 Krabi 0 156 87% 2. Krabi 0.156 3. Chumphon 0.133 4. Nakhonsithummarat 0.052 5. Phangnga 0.027 6. Other 0.174

Farmer 0.19 M. HouseholdOil Palm Plantation 0.73 M. ha and 12.50 M. ton FFB.Oil Extraction 145 mills capacity 22 81 M ton FFB /yearOil Extraction 145 mills capacity 22.81 M. ton FFB./yearOil Refinery 18 mills capacity 2.38 M. ton CPO./yearOil Refinery 18 mills capacity 2.38 M. ton CPO./yearBiodiesel 10 mills capacity 4.34 M. ton CPO/day

Soap / Feed

Food ind., Instant Noodle, RBDPO

FarmerOil Extraction

145 millsFFB Export

CPO Ice cream, Creamer

0.19 M. HH.( > 85 % Smallholder)

22.81M. ton FFB./Y.

Refiner

18 MillsExportOlein

2.38

M Ton /Y Chemical, Soap, FeedStearin

Domestic

M. Ton /YCreamer, Margarine, Food

(4 34 M ton CPO/day)

PFADB100 10 mills

(4.34 M. ton CPO/day)

Company Logo

Other inds.PFAD

Palm Oil Utilization of Thailand 2006-2014 Palm oil in Thailand Distribution 2006-2015

a O Ut at o o a a d 006 0 M. ton CPO.

2.302.04

2.43

0.31

0.570.26

1.55 1.67

2.171.93

0 380.63

0.77 0.840.420.16 0.16

0.39

1.12 1.131.32 1.361.43

0.060.27 0.37 0.38 0.380.21 0.260.93

0.91 0.81 0.86 0.79 0.81 0.90 0.93 0.96 0.940.43

0.03 0.06 0.04-0.072006 2007 2008 2009 2010 2011 2012 2013 2014

Consumption Biodiesel Export ImportGR.=6.95% GR. =9.86%

TotalGR. =35.07%GR. =1.48%

Palm Oil Utilization of Thailand 2015 Palm Oil Utilization of Thailand 2015

CPO2.25 M. ton2.25 M. ton

BiodieselDomestic Use Export Stock(38 %)(42 %) (3 %) (18 %)

Oil Palm and Palm Oil Prices 2010-2015Oil Palm and Palm Oil Prices 2010 2015Unit : Baht/ Kg

36.5940.00

45.00

29.10 30.8625.24

28.57 27.0033.2129 73

30.00

35.00 GR. -4.00

27.74 29.73

23.91 24.3720.6120.00

25.00

GR. -5.71

4 26 5.34 4.913 54 4 27 4 40

10.00

15.00

GR. -3.984.26 3.54 4.27 4.40 

0.00

5.00

2553 2554 2555 2556 2557 2558 F2553 2554 2555 2556 2557 2558 F.

farm gate price_Thai CPO wholesale price_Thai CPO wholesale price_Malaysia

ทมีา : BURSA MALAYSIA

Mi i t f A i lt d C ti h i d Ministry of Agriculture and Cooperatives has issued the standards for oil palm production;the standards for oil palm production;1 Standard of Fresh Fruit Bunch (2009)1. Standard of Fresh Fruit Bunch (2009)2 Standard of Good Agricultural Practice GAP (2010)2. Standard of Good Agricultural Practice, GAP (2010)3. Standard of Good Bunch Collectors Practice (2012)3. Standard of Good Bunch Collectors Practice (2012)

Free trade Zero Tariff (from 1 January 2010) AFTAAFTA

Free trade Zero Tariff (from 1 January 2010)

WTOWTOTariff Quota

I t t iff 20% Q tit 4 860 t• In - quota : tariff 20% Quantity 4,860 tonsO t q ota : tariff 143%• Out - quota : tariff 143%

LOGO

Oil Palm and Palm Oil Industries Development StrategyOil Palm and Palm Oil Industries Development Strategy20152015--20262026

Oil Palm and Palm Oil Industries Development Strategy 2015-2026

Problems and Constraints Analysis

p gy

Problems and Constraints Analysis 1. low production efficiency 1) Yield is low, because of

- Inappropriate of farm management and inadequate water resources- Inappropriate of farm management and inadequate water resources- Increase planted areas without supporting system and quality palm seedling

2) Oil E i R (OER) i l b f 2) Oil Extraction Rate (OER) is low, because of - Some farmers harvest unripe FFB

- Inappropriate measures for controlling FFB collectors - Capacity of Mills is over supply as a result of scramble for input (FFB). In

addition, extraction mills are continually set up. - Extraction mills grade B still have problem in the quality of palm oil and high t act o s g ade st ave p ob e t e qua ty o pa o a d g cost of production. Moreover, lack of enforcement of FFB standard.

Oil Palm and Palm Oil Industries Development Plan for 2015-2026p

Problems and Constraints Analysis2. High Cost of Production, because of

Problems and Constraints Analysisg ,

- The majority is small scale farmers, as a result of high unit cost of d i I 2015 i i f d h f f ili d h i l d production. In 2015, it is found that cost of fertilizer and chemical used

is 37 percent and labor cost is 34 percent- Most farmers are lack of knowledge on using fertilizer by age and

growth of oil palm and on irrigationgrowth of oil palm, and on irrigation. - High transportation cost due to mills are far from planted areas - Planted areas is unsuitable as a result of increasing investment.

Oil Palm and Palm Oil Industries Development Plan for 2015-2026pProblems and Constraints Analysis

3. Marketing 1) Price : 1) Price :

- Collectors do not buy FFB by quality C ili i f bl il f i i ll d i l di h - Ceiling price of vegetable oil for consumption is controlled, including the ceiling price of input of Biodiesel production

2) Downstream Industries - Processing for value added products is minimal

- Increasing use of palm oil for energy purposes is limited3) Administration and Management3) d s o d ge e

- Lack of accurate and timely information Law enforcement is not compulsory eg Lack of controlling on repeating - Law enforcement is not compulsory, eg. Lack of controlling on repeating frying oil

Oil Palm and Palm Oil Industries Development Plan for 2015-2026p

VisionOil Palm Industry is sustainable for food security, clean energyand environmental friendlyand environmental friendly

Mission I d ti t t d ti ti d d Increase production to meet domestic consumption demand,

alternative energy and exportgy p

Target : Increase productionTarget : Increase productionby by -- Increase Productivity Yield Increase Productivity Yield 22 22 ton/Ha. ton/Ha.

OER OER 2020..0 0 %%PlansPlans -- ReplantReplant-- New plantation on unused land and suitable landsNew plantation on unused land and suitable lands

New Plant 0.04 M. ha /Y.Plantation 2015

0.71 M. haPlantation 2026

1.19 M. haReplant 4,800 ha /Y.

OER. 2015 OER. 202618.00% 20.00%

Yi ld 2015 Yield 202622 ton/ha

Yield 201520 ton/ha

ConsumptionConsumptionpp•• Growth Growth 33..00 00 % per year% per year

BiofuelBiofuelBiofuelBiofuel•• Mandatory BMandatory B7 7 and up to Band up to B12 12 (B(B7 7 + B+ B2020) ) (( by by 20262026))

ExportExportExportExport•• Mandatory Mandatory 00..3 3 M. ton CPO /Y.M. ton CPO /Y.

3 50 3.62

3.84 3.974.11

4.29 4.45

4.74

4.004.505.00M. ton CPO.

2.47 3.043.22

3.373.50 3.62

2.002.503.003.50

B11 B11B12

2.601.35

0.501.001.50 B8 B8B8

B10 11B10B9 B11B10B9 B9

1.351.02

1.35

0.002015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026Stock Export Energy_Gr7% Con_Gr3% Supply

Oil Palm and Palm Oil Industries Development Strategy 2015-2026p gy

4 Phases of Roadmapp1. Immediately less than 1 yeareg. - Determine suitable areas for expanding oil palm plantation

- Enforcing standards related to oil palm- Increasing channel of palm oil consumption- Designate mills to buy FFB as requiredg y q

2. Short term 1 – 3 yearseg. - Increase Oil Palm Planted Areas

- Increase Production Efficiencyy- Adoption ASPO Standards- Research and Development - Research and Development

Oil Palm and Palm Oil Industries Development Strategy 2015-2026p gy

4 Phases of Roadmap (Continue)p ( )3. Medium term 3 – 5 yearseg. - Management for FFB Quantity to Meet Capacity of the Mills

- Support Oil Palm and Palm Oil Development Organizations and Funds- Develop Infrastructure and Logistics for supporting Oil Palm Industries- Research and Development p

4. Long term 5 – 12 yearseg. - Coordinate and Cooperate with ASEAN Countries in order to Expand Market

- Support the Establishment of Brand with ASPO Standardspp- Research and Development

Target : Increase competitiveness of Oil Palm Industry g p y1. Increasing Production Efficiency of Farmers

1.1 Increase Yield1 2 Increase Oil Extraction Rate (OER)1.2 Increase Oil Extraction Rate (OER)1.3 Determine Suitable Areas (Zoning)

2. Increasing Production Efficiency of Mills (OER Capacity)3. Price Stability3. Price Stability

3.1 Trading Oil Palm by using OER and Quality3.2 Pricing is driven by Market Mechanism3.3 Appropriate Administration and Management by Thailand Oil pp p g y

Palm Board3 4 I i Ch l f P l Oil C i d P i f 3.4 Increasing Channel of Palm Oil Consumption and Processing of

Value added Products

1. Increasing Production Efficiency and Decreasing Production Cost of Farmers

1.1 Increasing Yield Research and DevelopmentBreeding Development and Nursery Control 1.2 Increasing OERRehabilitation / Replanting Optimal Farm Management /

Nursery Control

Transferring Technology and Optimal Farm Management / Harvest Ripe FFB

Appropriate Use of Fertilizer Quality Control for Collection FFB and Implement Standard of CollectorsEnforcing standards and p

Infrastructure and Logistics

Enforcing standards and Regulatory Related to Oil Palm

gManagement of the CooperativesFarmers Grouping for

Increasing Efficiency

Average Yield Increase to 3.5 Ton/Rai OER Increase 1 – 3 %

1.3 The Diagram Indicates Situation Areasfor Oil Palm Plantation(Ministry of Agriculture and Cooperatives)

www.themegallery.com

( y g p )

2. Increasing Production Efficiency of Mills

Chart of Mills in Thailand Oil Palm Planting Areas, Surat Thani Province

กําลังการผลิต กําลังการผลิตจริง สกัดแยก สกัดรวม รวม สกัดแยก สกัดรวม รวม (ล้านตัน/ปี) (ล้านตัน/ปี) (ร้อยละ) (ร้อยละ)

ภาคใต้ 68 52 120 3,245 194 3,438 21.46 11.43 91.44 53.27

ผลผลิตปาล์ม ปี 57 จังหวัด

จํานวนโรงงาน กําลังการผลิต (ตัน/ชม.)

S1 = Highly suitable

www.themegallery.com

ภาคกลาง 12 8 20 177 14 192 1.20 0.96 7.68 80.20 ภาคเหนือ+อีสาน 3 2 5 24 1 25 0.15 0.11 0.88 71.37

รวม 83 62 145 3,445 209 3,655 22.81 12.50 100.00 54.81 ร้อยละ 57.24 42.76 100.00 94.27 5.73 100.00

g yS2 = Moderately suitableN = Not suitableOil palm Planting

3. การเพมิขดีความสามารถในการแข่งขนัของอตุสาหกรรมปาล์มไทยุ

3 Price Stability Guidelines3. Price Stability Guidelines3.1 Trading Oil Palm by using OER and Quality3.2 Pricing is driven by Market Mechanismg y3.3 Appropriate Administration and Management by National Oil

P l C iPalm Committee