Thai Chili Sauce 'Nam Prik Pao'
from http://thaifood.about.com/

This meal accompaniment is one of the most ubiquitous items in the Thai cuisine. Everywhere you look, you see it. On make-shift tables set up by street food vendors. On the tables of sit-down type of restaurants. On your family dining table. On the seasoning table in every corner of every food court. In a tiny bowl that comes with the plate of fried rice you order. In a little rubber band-fastened plastic bag nestled inside your fried rice to-go box.

Nam-pla prik acts like a flavor enhancer (mainly for rice or rice-based dishes). You take a spoonful of it and drizzle over or mix into whatever it is that's on your plate. If your fried rice is a little bland, or could use some heat, a dab of fish sauce and a few pieces of fresh chilies would be of tremendous help.

Nam Prik Pao is almost always referred to as roasted chili paste or chili paste in oil. Some call it chili jam or roasted chili jam which is more specific, less ambiguous, and more consistent with what it really is. It’s made out of the pulp and seeds of a fruit, chili. The fruit along with other ingredients are puréed and cooked down to jam-like consistency. It’s also sweet in flavor. Nam Prik Pao isn’t supposed to be super hot; it doesn’t need to be. The key is the salty-sweet-sour balance, not how many chilies you can pack into it.

1/4 cup canola or coconut oil, plus a little more to finish (or light vegetable oil of your choice)
4 cloves garlic, finely chopped
2 shallots, finely chopped
dried whole OR crushed red chilies, ground to make 3 Tbsp. powder (you can also use cayenne pepper which is already ground)
1/2 to 1 tsp. shrimp paste, OR 1 extra Tbsp. fish sauce
2 Tbsp. fish sauce
2-3 Tbsp. palm or brown sugar, or more to taste
1/2 to 1 tsp. tamarind paste (available at Asian or Indian food stores)
1+1/2 Tbsp. lime juice
2 Tbsp. water

Preparation Tips: Although traditionally the shallots and garlic are finely chopped by hand, you can also use a food processor for this task. Just be sure not to over-process, or you will end up with a mushy mess. What you want are individual-looking pieces of shallot and garlic.

If Using Whole Dried Chilies: simply place them in a coffee grinder (or food processor) and blitz until you get a powdery consistency.
Heat oil in a small frying pan over medium-high heat. Add the chopped shallots and garlic, frying until they turn a very light golden brown and slightly crispy (2-3 minutes).

Tip: try not to over-brown the garlic, or it will turn bitter.

Remove garlic and shallots with a slotted spoon from the oil and set in a bowl to cool. Leave remaining oil in the pan. Using a pestle & mortar OR food processor/mini-chopper, combine the prepared chili with the shrimp paste, fish sauce, sugar, tamarind, lime, and water. Also add the fried garlic and shallots.

Pound or process all together to form a thick paste. Return this paste to your frying pan and stir it into the oil over low heat, gently simmering until you get a fairly even consistency. Adjust the consistency by adding a little more water if you find it too thick, or more oil if you prefer a "shinier" sauce.

Adjust the taste, adding more fish sauce if you'd like it saltier, or more sugar if you'd like it sweeter (I usually end up adding another 1/2 Tbsp. of fish sauce and another Tbsp. of brown sugar to mine).

Nam Prik Pao will keep for several months stored in a covered jar in your refrigerator. Use your Nam Prik Pao as an addition to Thai soups, or added as a flavor booster to Thai stir-fries and curry sauces. Also wonderful when stir-fried with seafood, or as an accompaniment to noodles.

Makes a small jar of Nam Prik Pao - about 1/2 cup (a little goes a long way!)