BANGKOK, THAILAND – Prices for palm oil and bottled drinking water in Thailand’s supermarkets and small shops rose sharply, driven by higher energy and packaging costs and disruptions linked to the conflict in the Middle East.
Palm oil surge hits home and street kitchens
According to Somchai Phorrattanajaroen, honorary adviser to the Thai Wholesale and Retail Association, producers raised wholesale prices for palm oil across all bottle sizes and packaging over the past week. The increases were reported throughout the wholesale and retail network.
For a standard 1‑liter bottle, the association said the wholesale price climbed by 7 to 8 baht, from 41 baht to 48–49 baht. After retail mark-ups, shelf prices now stood at around 50 to 51 baht per bottle in many outlets.
New competition for palm oil supplies
Producers cited sharply higher demand for palm oil in connection with planned government measures to increase biofuel blending. Energy authorities were preparing to raise the biodiesel share from B5 to B7, which was scheduled to take effect by 14 March, according to the information provided.
This move was expected to intensify competition for palm oil stocks between the fuel trade and edible oil manufacturers. Palm oil supplies thus faced pressure from both the energy sector and food producers.
Discounts end after B7 announcement
Somchai noted that there had been many special offers in January and February thanks to the seasonally higher palm fruit harvest. Retailers had widely promoted lower prices during this period.
Following the political announcement on B7, these promotions were discontinued. At the same time, manufacturers implemented the new wholesale prices, pushing retail palm oil prices above the 50‑baht mark in many places.
Bottled water in packs becomes more expensive
The association also reported a new pricing round for bottled water, with producers raising wholesale conditions for traders. The changes primarily affected locally produced bottled water in the common 500‑cc size.
For this format, the wholesale price per pack increased by 5 baht, from 20 baht to 25 baht. Retailers were expected to pass on these higher costs to consumers over time.
Plastic, oil prices and diesel squeeze margins
Water producers explained the move with rising costs for plastic granulate used to make packaging, which followed global oil prices. These higher input costs put additional pressure on margins in the beverage sector.
Logistics expenses also rose, as transport using diesel became more expensive. The combined effect of packaging and fuel costs weighed on producers’ overall calculations.
5‑baht snacks disappear from the shelves
Another impact was seen in the segment of packaged snacks. Manufacturers informed retailers that they planned to halt production and distribution of small bagged snacks priced at 5 baht.
They justified the decision with a lack of economic viability, as prices for plastic packaging material had risen so steeply. Under current cost conditions, the ultra‑low‑price format was no longer considered cost-covering for producers.