By CESAR JOLITO III
The Sugar Regulatory Administration (SRA) released a moratorium on molasses importation and is set to review certain policies that govern such to find a balance that will be beneficial to local producers and consumers.
SRA Administrator Pablo Luis Azcona said the moratorium will last until the end of this year and could be extended or lifted by the sugar board depending on the stock balance.
At the moment, Azcona said SRA will not process any more “clearances for the release of imported molasses.”
However, he added that 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.
In its order issued last September 30, the board highlighted the fact that molasses importation in the last crop year increased by 28 percent compared to previous years, totaling 853,285 metric tons.
This policy came 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 as compared to the previous crop year.
The SRA said this has resulted in a molasses mill site stock balance of 303,961 metric tons as of the end of August.
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, 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 domestic molasses 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 gasoline.
Azcona said that they 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,” he 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 a locally produced molasses shortage.”
SRA said they are assuring farmers and millers that a performance-based policy regarding import allocation for molasses will be crafted, and this will allow a calibrated, fair and objective process for molasses importation./CJ, WDJ