BACOLOD City – The Sugar Regulatory Administration (SRA) has issued a moratorium on molasses importation as it reviews existing policies to strike a balance that will benefit both local producers and users.
In Molasses Order No. 1, issued on September 30, the Sugar Board noted that molasses importation in the last crop year increased by 28 percent compared to previous years, reaching 853,285 metric tons (MT).
This came despite a 20.5 percent rise in domestic production, which totaled 1.176 million MT, or more than 200,000 MT higher than the previous crop year. As of the end of August, this left a molasses millsite stock balance of 303,961 MT.
The call for a moratorium was pushed by industry stakeholders following a noticeable drop in the withdrawal of local molasses from mills, along with a steep decline in domestic prices. Local molasses now average P12,000 per MT, about 30 percent lower than last year’s P18,000 per MT.
The bulk of domestic molasses production is supplied to ethanol producers, enabling oil companies to comply with the Biofuels Law that mandates a blend of locally produced ethanol in gasoline, the order added.
SRA Administrator Pablo Luis Azcona said the agency intends to closely examine the “discrepancy” between the volume of locally produced molasses and the actual output of alcohol production.
“We also need to see why locally purchased molasses from farmers remain unwithdrawn and unused. Hence, there is no need to import,” Azcona stressed.
He added that ethanol producers should strictly source their feedstock locally, as mandated by law, while alcohol producers must prioritize the use of high-quality local molasses before turning to lower-quality imports.
Azcona further revealed that, “surprisingly, in the life of the SRA, there have been no concrete policies or guidelines on molasses importation and allocation to ensure that farmers’ produce is consumed first, and that imports serve only as a stopgap measure in case of shortage.”
To address this, the SRA assured farmers and millers that it will craft a performance-based policy on molasses importation. This will allow a calibrated, fair, and objective process for future allocations.
The moratorium will remain in effect until the end of the year and may be extended or lifted depending on stock balances.
For now, the SRA will no longer process “clearances for release of imported molasses.” However, Azcona clarified that applications filed prior to the issuance of Molasses Order No. 1, or shipments already in transit, will not be covered by the suspension./PN
