SRA halts molasses importation

By Dolly Yasa

BACOLOD CITY — The Sugar Regulatory Administration ordered a suspension of molasses importation and will review policies that govern it to find a balance beneficial to local producers and users.

In a press statement issued Thursday, the SRA said that in Molasses Order No. 1 issued Sept. 30, the Sugar Board noted that molasses importation in the last crop year increased by 28 percent from previous years, totaling 853,285 metric tons.

This came despite a 20.5 percent increase in domestic production to 1.176 million metric tons, or more than 200,000 metric tons higher than the previous crop year.

This resulted in a molasses millsite stock balance of 303,961 metric tons as of the end of August, the statement said.

The call for a moratorium on molasses importation was issued by sugar stakeholders after a noticeable decrease in the withdrawal of local molasses from mills and a decrease in the price of domestic molasses, which averaged PHP 12,000 per metric ton or about 30 percent lower than in the previous crop year when the price averaged PHP 18,000 per metric ton.

The SRA said the bulk of domestic molasses production is used by ethanol producers, which allows oil companies to comply with the Biofuels Act that mandates a blend of locally produced ethanol in gasoline.

The SRA, an agency attached to the Department of Agriculture, regulates the production, distribution, and trade of sugar and related byproducts, including molasses and fuel ethanol.

Molasses, a byproduct of sugar production, is a key feedstock for ethanol and industrial alcohol and is also used in livestock feed.

SRA Administrator Pablo Luis Azcona said the agency would like to take a closer look at the “discrepancy” in the volume of locally produced molasses used versus the amount of alcohol production.

“We also need to see why the local molasses purchased from the farmers still remain unwithdrawn and unused. Hence, there is no need to import,” Azcona said.

“I think it is imperative that we know where these ethanol and alcohol producers are sourcing their molasses from. For the ethanol producers, we hope that their feedstock is really local as the biofuel law states, and for the alcohol producers, that they consume the local produce first, which is actually of higher quality, prior to resorting to lower quality imported molasses.” Azcona added.

Moreover, Azcona said they were “surprised that for the life of the SRA, there are no concrete policies and guidelines on molasses importation and its allocation, to ensure that local farmers’ produce is consumed first, and that imports are only a non-definite stop gap measure if we have locally produced molasses shortage.”

The SRA said it is assuring farmers and millers that a performance-based policy on import allocation for molasses will be crafted, which will allow a calibrated, fair, and objective process for molasses importation.

The SRA chief said the moratorium will last until the end of this year and can be extended or lifted by the SRA depending on the stock balance.

At the moment, Azcona said the SRA will no longer process “clearances for release of imported molasses,” but applications filed with the SRA before Molasses Order No. 1 or imported molasses already in transit will not be covered by the moratorium.