Thailand’s Energy Ministry has asked the Energy Business Department to collaborate with local palm oil traders to create a blockchain solution for the palm oil industry.
Energy Minister Sontirat Sontijirawong said the blockchain system will be implemented in June, and will serve as a remedy to farmers who have trouble turning a profit due to low and unstable palm oil prices.
“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 kilogramme,” said Sontijirawong.
Palm oil is frequently used to make biodiesel for cars and trucks. A biodiesel blend is when biodiesel is blended with petroleum diesel. Fuel containing 5% biodiesel and 95% petroleum diesel is called B5; the most common blends of biodiesel and petroleum diesel are B5, B10 and B20.
Sontijirawong said the ministry is expecting the country to produce 2.2 million tonnes of CPO in 2020. To make this happen, the Energy Ministry plans to substitute B7 with B10 in primary diesel for this year. B20 is also an alternative diesel with subsidized prices.
Impact of COVID-19 on palm oil trade
Before the global pandemic, the ministry took measures to increase the price of fresh palm nuts from 1.80 baht ($0.06) in April 2019 to 3.20 baht ($0.10) per kg in mid-June 2019.
However, the coronavirus pandemic had an adverse effect on the consumption of palm oil, which created a surplus and reduced prices. A contributing factor to the economic impact is the management of palm oil production and consumption; most farmers in Thailand are smallholders—a person who owns or manages an agricultural holding smaller than a farm—and lack technical and monetary support to innovate production.
Sontirat Sontijirawong said the outbreak affected consumption of palm oil for cooking and biofuel, especially B100 in April, decreasing by 400,000-500,000 litres per day from March.
New to blockchain? Check out CoinGeek’s Blockchain for Beginners section, the ultimate resource guide to learn more about blockchain technology.
