A moratorium on molasses importation was ordered by the Sugar Regulatory Administration (SRA), following a reduction of its price by 30 percent per ton and a decrease in the withdrawal of local molasses from the sugar mills.
In Molasses Order No. 1 issued Sept. 30, the Sugar Board highlighted the fact that molasses importation in the last crop year increased by 28 percent than in previous years, totaling to 853,285 metric tons.
This, despite an increase in domestic production of about 20.5 percent amounting to 1.176 million metric tons, or an increase of more than 200,000 metric tons compared to the previous crop year.
This has resulted to a molasses millsite stock balance of 303,961 metric tons as of end of August, a statement from the SRA said.
SRA Administrator Pablo Luis Azcona stressed the need for a review on certain policies that govern such to find a balance that will be beneficial to local producers and users.
Sugar stakeholders called for a moratorium on molasses importation after noticing a decrease in the withdrawal of local molasses from mills, plus a decrease in the price of domestic molasses, averaging P12,000 per metric ton which is about 30 percent lower than in the previous crop year when the price was averaging at P18,000 per metric ton.
The bulk of molasses domestic production is used by ethanol producers, which allows oil companies to subscribe to the biofuel law that mandates a blend of locally produced ethanol in the gasoline.
Azcona said they would like to take a closer look at the “discrepancy” in the volume of locally produced molasses used against 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,” he added.
“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 said.
He also noted “there are no concrete policies and guidelines on molasses importation and its allocation since the SRA was established 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.”
Azcona said that the performance-based policy that will be formulated will allow a calibrated, fair, and objective process for molasses importation
The moratorium will last until the end of this year, and can be extended, or lifted by the SRA depending on the stock balance, he added.
While the SRA will no longer anymore process clearances for release of imported molasses, he said that the applications filed with the SRA prior to the Molasses Order No. 1 or those imported molasses already in transit, will not be covered by the moratorium. ||
