SRA sees bioethanol production a viable solution to sugar oversupply
The Sugar Regulatory Administration (SRA) on Friday encouraged bioethanol producers to use more of the surplus sugar in warehouses and help the sugarcane sector diversify, considering that world prices of the commodity remain volatile.
Markel Silva's insight:
“Administrator Ma. Regina Martin reiterated that in support of the diversification efforts of thePhilippine sugarcane industry and in order to expand the market of sugar, the use of "D" or world market sugar for the production of bioethanol... is encouraged,” SRA noted in an e-mailed statement. "Price situation in the world market remains volatile and the bioethanol mandate could very well absorb the surplus sugar at viable price levels," according to the SRA chief. SRA data showed actual shipments to the world market totaled 140,000 metric tons (MT) as of August 2. Sugar production in crop year 2012-2013 reached 2.457 million MT, up 9.5 percent year-on-year. On Friday, the administration issued Sugar Order 1 which specifies that 86 percent of output be allocated to the domestic market, 12 percent to the world market, and 2 percent to fill the US quota. Allocation for "A" sugar or US sugar quota will be minimal this year taking into consideration the 57,000 MT that were not shipped in the crop year that just closed. The Philippines enjoys a regular US quota of 138,000 MT, but only 53,690 metric tons were shipped to the US as prices have sagged because of an oversupply in the mainland and the unlimited access enjoyed by Mexican sugar to the US market. SRA allowed unshipped "A" sugar to be reclassified as "D" sugar, but there is still a considerable amount of reclassified sugar in warehouses. "The US market continues to be a reliable market and remains an instrument to stabilize domestic sugar supply that its allocation is imperative regardless of volume," Martin noted in Sugar Order 1.
For crop year 2013-2014, SRA expects product to reach 2.45 million MT or hardly changed from the 2012-2013 output.