Sugar millers oppose additional molasses imports

Sugar millers are opposing the proposal to allow the importation of additional molasses for bioethanol production, arguing that there is sufficient supply of the raw material locally.

In a statement, the Philippine Sugar Millers Association Inc. (PSMA) cautioned against additional imports of molasses for bioethanol production.

This comes after The STAR reported that the Ethanol Producers Association of the Philippines (EPAP) is urging government to allow the regulated importation of molasses to maximize the operations and lower their production costs of ethanol producers, thereby leading to better bioethanol prices.

Molasses is a by-product of extracting sugar from sugarcane, used by distilleries to produce alcohol and ethanol.

“There is no reason to import molasses for bioethanol. Local molasses production is on the upswing, and our demand has been soft and slow. Molasses inventories are building up that there has been an overflow in molasses tanks in some mills in recent months,” PSMA executive director Jesus Barrera said.

Citing data from the Sugar Regulatory Administration (SRA), Barrera said that as of Jan. 29, molasses production reached 471,046.18 metric tons (MT), higher by 3.38 percent from last season.

The data also showed demand went down nearly 17 percent to 349,509 MT.

The higher production and lower demand leave the country with a national molasses inventory of 262,893 MT.

Barrera said the volume of inventory has been increasing in the past months.

“SRA records show that our total molasses balance millsite was 162,987 MT in end-October 2022 and 185,360 MT in end-November 2022. By January 29, 2023 it had grown to 262,893 MT – 8.08 percent higher than that of the same period last year. We have sufficient supply. There is no national emergency or shortage of molasses. We do not need to import more molasses specifically for bioethanol production,” he said.

Last year, the country imported 608,310 MT molasses for potable alcohol and animal feeds, up by 80 percent from 2021.

For January alone, the country’s molasses imports were up 80 percent to 88,702 MT.

EPAP executive director Queenie Rojo earlier said the ethanol industry needs 1.6 million MT of molasses to fully support their operations, however, the SRA only reports a maximum of 1.1 million MT.

Because of the shortage in raw materials, she said the industry’s capacity utilization hovers only at 75 to 78 percent, with smaller factories not operating for two to three months.

The SRA has been rejecting EPAP’s proposal since this was found to be against the Biofuels Act of 2006.

Under the Biofuels Act of 2006, all liquid fuels for motors and engines sold in the Philippines contain locally sourced biofuels such as bioethanol, biodiesel and other fuels made from biomass.

The law defines locally produced bioethanol as those derived from feedstocks grown/planted, harvested and processed in the country.

Currently, local bioethanol producers can only supply 50 percent of the bioethanol requirement for the 10 percent gasoline blending, or E10, while the other 50 percent is served by ethanol imports, which are mainly sourced from the US.

In a recent report, the United States Department of Agriculture said it expects the Philippines to accelerate its total fuel ethanol imports by 33 percent to 300 million liters this year to fill in the gap due to the expected increase in consumption.