Thailand will buy 100,000 tonnes of crude palm oil from domestic producers between June and November using a government fund of 2.9 billion baht ($85.2 million), a senior government official said on Monday. Thailand is the world's third-largest palm oil producer, although its output is a fraction of that of top producers Indonesia and Malaysia.
The government purchases aim to keep the domestic price of palm oil competitive and relieve oversupply, Lersak Rewtarkulpaiboon, a secretary general at the country's Office of Agricultural Economics told reporters. The domestic crude palm oil inventory has reached 300,000 tonnes recently, more than the 220,000 tonnes the government sees as adequate. The plan goes to the cabinet for approval at a meeting on Tuesday, he added.
Thailand's economy grew just 0.9 percent last year, with a political crisis taking it to the brink of recession in the first half. The central bank recently cut its 2015 economic growth forecast to 3.0 percent from 3.8 percent. Thai Prime Minister Prayuth Chan-Ocha led a military coup in May last year to restore order after several months of street protests in Bangkok, ousting the government of Prime Minister Yingluck Shinawatra, Thailand's first woman prime minister.