Blockchain Technology Eyed for Palm Oil

Blockchain Technology Eyed for Palm Oil

Blockchain
May 14, 2020 Editor's Desk
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The Energy Ministry has ordered the Energy Business Department to discuss with Thai oil traders the prospect of utilizing blockchain to promote palm oil trade. A blockchain system would skip out the agent between palm planters and palm oil mills, in theory providing planters to trade the commodity at higher prices. Energy Minister Sontirat Sontijirawong
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The Energy Ministry has ordered the Energy Business Department to discuss with Thai oil traders the prospect of utilizing blockchain to promote palm oil trade.

A blockchain system would skip out the agent between palm planters and palm oil mills, in theory providing planters to trade the commodity at higher prices.

Energy Minister Sontirat Sontijirawong stated in a statement that the ministry assumes to execute a blockchain system in June as a relief measure for planters struggling with low, unstable palm prices. He refused to embellish on the details.

“The government is trying to control domestic palm oil prices and raised the content of blended biofuel gasoline to 10% [B10] and 20% [B20] in April 2019 to absorb the surplus volume of crude palm oil [CPO] and keep the price of fresh palm nuts above three baht per kilogram,” he stated.

The ministry assumes the country to provide 2.2 million tonnes of CPO this year. Recently, planters sell palm nuts, the raw material utilized to make palm oil, at 2.70 baht per kg to intermediaries. However, the real cost of palm nuts should be 3.50 baht per kg, said planters.

The ministry intends to mandate B10 as a primary diesel, substituting B7 in 2020, while B20 is designed as an alternative diesel with subsidized prices.

Earlier, the ministry ordered the Electricity Generating Authority of Thailand (Egat) to utilize CPO for power generation at the Bang Pakong power plant in Chachoengsao province.

Egat consented to buy two batches of CPO. The first completed purchase agreement was for 160,000 tonnes, and the second-order of 200,000 tonnes is still being processed.

Both measures have developed the price of fresh palm nuts to 3.20 baht per kg since mid-June 2019, from 1.80 baht in April last year. Mr. Sontirat said in a statement the outbreak affected the consumption of palm oil for cooking and biofuel, particularly B100 in April, decreasing by 400,000-500,000 litres per day from March.

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