Ethanol industry’s demand for molasses drops, SRA says

By on September 18, 2017

THE Sugar Regulatory Administration (SRA) said it will look into the reduced purchases of feedstock by ethanol producers, which has reportedly caused stocks of molasses held by sugar mills to rise, BusinessWorld reported Sept. 18.

SRA Planning and Policy Manager Rosemarie S. Gumera said ethanol production was 117 million liters as of end-June, only 45% of the 260 million liters targeted for this year. The output for 2016 was 230 million liters.

“Some ethanol plants have slowed down in their operations, so molasses purchases are down. That is why we have received reports that some sugar mills’ molasses tanks are overflowing,” Ms. Gumera said in an interview with BusinessWorld last week in Quezon City.

Data from the SRA showed that molasses output totaled 1.46 million metric tons (MT) during the 2016/2017 crop year which runs from September to August, up 21.67% from a year earlier.

Of the country’s 11 bioethanol plants, most use molasses while others are multi-feedstock users.

Inadequate molasses production has been a constraint on ethanol output. Currently, the industry is testing constraints of another kind — mill storage capacity of molasses, a sugar refining by-product.

Molasses held by mills as of Aug. 31 was 365,109.12 MT, well above the previous crop year’s ending balance of 162,895.17 MT.

Ms. Gumera said the drop in demand for domestic ethanol could be due to a decline in overall fuel demand or competition from imports.

Under Republic Act 9367, or the Biofuels Act of 2006, oil companies are required to use least 5% bioethanol in gasoline.

The law requires that this be fulfilled via locally sourced bioethanol. However, due to the inability of domestic supply to meet demand the government has allowed oil producers to fill the void through imports.

“Oil companies have said they are complying with the law. But maybe they imported too much, or that demand has slowed down. Those are the possibilities,” Ms. Gumera added.

The SRA official said it will continue to monitor molasses withdrawals at the mills.

A new ethanol plant in Balayan, Batangas owned by Emperador Distilleries, Inc. is expected to operate next year.

The facility has a capacity of around 50 million liters which will bring total ethanol capacity to around 372 million liters next year. — Janina C. Lim

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