Surplus sugar planned for use in producing biofuels — SRA
11/10/2008 | 04:21 AM
MANILA, Philippines - The Sugar Regulatory Administration (SRA) is drafting a plan to allocate surplus sugar for bioethanol production.
Selling raw sugar to biofuel producers is one of the options to make use of surplus sugar, said SRA Administrator Rafael L. Coscolluela in a phone interview late last week. "Even now, there are already requests [from biofuel producers] to sugar mills for the use of ’D’ sugar [for export to countries other than the United States] for conversion to ethanol," he said. "In the long run, biofuel players will want alternative feed to ensure year-round supply for their production."
According to the plan, SRA will match biofuel producers with sugar millers and planters for the purchase of sugar as feedstock.
The plan, to be finished by yearend, will be implemented next year, Mr. Coscolluela said.
Last September, SRA raised "D" sugar allocation to 7% in the 2008-2009 crop year from 4% in the past year. This increased allocation raised "D" sugar to 156,100 metric tons from 97,080 MT.
Sugar production in the 2007-2008 crop year hit a 25-year-high of 2.455 million metric ton.
Of this "D" surplus, 60,000-70,000 MT will be purchased by local food manufacturers while the remaining 80,000 metric tons will be made available to biofuel producers, Mr. Coscolluela said.
Sugar millers can sell surplus to local biofuel producers rather than export it and pay high freight costs, Mr. Coscolluela said.
Prices of "D" sugar last week averaged P750 per 50-kilogram bag in the world market and P635/Lkg bag locally.
Late last month, independent player Seaoil Philippines, Inc. expressed interest in buying surplus sugar as biofuel feedstock.
Republic Act No. 9637, or the Biofuels Act of 2006, mandates a 5% ethanol blend in gasoline next year, rising to 10% in 2011.
Mr. Coscolluela said biofuel producers can store "D" sugar for years and convert them to ethanol when they run out of regular feedstock. This, as the Food and Agriculture Organization has cited sugarcane as having the highest biofuel yield among other feedstocks like cassava and sweet sorghum.
At the same time, sugar millers assured there would be enough supply for domestic food consumption amid the new market for sugar produce.
"We are only considering surplus [for biofuel production]. Under no condition are we going to allow sugar for domestic consumption to be used for biofuel production," Francisco D. Varua, executive vice-president of the Philippine Sugar Millers Association, said in a phone interview late last week.
But to ensure sufficient stock for biofuels production, the buying price of biofuel producers should be higher than domestic and world prices, Mr. Varua said.
To date, there is only one refinery processing feedstock for biofuel production, the 150-million liter per year E-Cane Fuel Corp. in Central Luzon.
Another refinery, that of San Carlos Bioenergy Inc. with 35-39 million liters per year capacity, in Negros Occidental is scheduled to start commercial operations in January. - BusinessWorld
Selling raw sugar to biofuel producers is one of the options to make use of surplus sugar, said SRA Administrator Rafael L. Coscolluela in a phone interview late last week. "Even now, there are already requests [from biofuel producers] to sugar mills for the use of ’D’ sugar [for export to countries other than the United States] for conversion to ethanol," he said. "In the long run, biofuel players will want alternative feed to ensure year-round supply for their production."
According to the plan, SRA will match biofuel producers with sugar millers and planters for the purchase of sugar as feedstock.
The plan, to be finished by yearend, will be implemented next year, Mr. Coscolluela said.
Last September, SRA raised "D" sugar allocation to 7% in the 2008-2009 crop year from 4% in the past year. This increased allocation raised "D" sugar to 156,100 metric tons from 97,080 MT.
Sugar production in the 2007-2008 crop year hit a 25-year-high of 2.455 million metric ton.
Of this "D" surplus, 60,000-70,000 MT will be purchased by local food manufacturers while the remaining 80,000 metric tons will be made available to biofuel producers, Mr. Coscolluela said.
Sugar millers can sell surplus to local biofuel producers rather than export it and pay high freight costs, Mr. Coscolluela said.
Prices of "D" sugar last week averaged P750 per 50-kilogram bag in the world market and P635/Lkg bag locally.
Late last month, independent player Seaoil Philippines, Inc. expressed interest in buying surplus sugar as biofuel feedstock.
Republic Act No. 9637, or the Biofuels Act of 2006, mandates a 5% ethanol blend in gasoline next year, rising to 10% in 2011.
Mr. Coscolluela said biofuel producers can store "D" sugar for years and convert them to ethanol when they run out of regular feedstock. This, as the Food and Agriculture Organization has cited sugarcane as having the highest biofuel yield among other feedstocks like cassava and sweet sorghum.
At the same time, sugar millers assured there would be enough supply for domestic food consumption amid the new market for sugar produce.
"We are only considering surplus [for biofuel production]. Under no condition are we going to allow sugar for domestic consumption to be used for biofuel production," Francisco D. Varua, executive vice-president of the Philippine Sugar Millers Association, said in a phone interview late last week.
But to ensure sufficient stock for biofuels production, the buying price of biofuel producers should be higher than domestic and world prices, Mr. Varua said.
To date, there is only one refinery processing feedstock for biofuel production, the 150-million liter per year E-Cane Fuel Corp. in Central Luzon.
Another refinery, that of San Carlos Bioenergy Inc. with 35-39 million liters per year capacity, in Negros Occidental is scheduled to start commercial operations in January. - BusinessWorld
