Thailand should expand its palm oil plantations despite the post-coup government scrapping a plan to grow the fruit for biodiesel, the Thai oil palm industry chief said on Tuesday.
"Whether the biodiesel from oil palm plan is abolished or not, we still need to expand oil palm plantations for other industries," Krisada Chavananand, head of the Palm Oil Crushing Association, told Reuters.
"We should promote palm oil to be used in sustainable ways as it has quite big room to grow," he added.
The government should expand planting areas to increase supply for other lucrative palm-based industries such as food, cosmetic and drugs, Krisada said.
It should also provide growing and crushing technology and logistic support to boost exports of palm products, especially kernel oil and oleo chemicals used widely in those industries, he said.
Kernels, from which oil can be extracted after the palm fruit was crushed, was used in several European countries in organic food processing industries, he said.
"Kernel oil is now $100 a tonne higher than crude palm oil, so why don't we try to create more value for kernel exports?"
Thai Energy Minister Piyasvasti Amranand told Reuters last week he had killed a grand plan to expand palm plantation and opted for the idea of mixing used cooking palm oil with diesel.
Global oil prices had stabilised below $60 a barrel, making a litre of pure palm oil more expensive than a litre diesel and it would make no economic sense for the government to subsidise the project, he said.
The plan aimed for net crude oil importer Thailand to produce 300,000 litres (66,000 gallons) of palm-based biodiesel a day, which meant an additional 640,000-800,000 hectares (1.58-1.98 million acres) of oil palms.
Thailand was expected to produce around 5.7 million tonnes of palm fruit in 2006, equivalent to around 700,000 tonnes of palm oil and used mostly for domestic consumption.