The Sugar Regulatory Administration (SRA) has slapped a temporary ban on molasses imports to stabilize domestic stocks and prop up millsite prices.
The SRA issued Molasses Order (MO) 1 following the surge in shipments of imported molasses and the spike in the local output of the raw sugar byproduct.
Molasses imports for crop year 2024-2025 jumped to 853,285 metric tons (MT) as of end-August, 28 percent higher than the average annual shipments in the three previous crop years.
Local production of the sugar byproduct also rose by 21 percent to 1.18 million metric tons (MMT) in the reference period from 975,934 MT last year. This resulted in a domestic millsite stock balance of 303,961 MT.
The SRA noted that the millsite price of domestic molasses also plunged by 30 percent year-on-year to P12,000 per MT as of August 24.
‘Farmers, planters, sugar mills, and other stakeholders have expressed grave concerns on the issues of the stock balance of domestic molasses as well as the marked decrease in its millsite prices,’ MO 1 read.
‘There is, likewise, a concern on the apparent discrepancy between the volume of locally produced molasses used as feedstock by bioethanol producers and the corresponding volume of the products resulting therefrom.’
As such, SRA Administrator Pablo Luis Azcona told the BusinessMirror that the agency needs to verify that the feedstock used for bioethanol was local.
Under the Biofuels Act of 2006 or Republic Act (RA) 9367, all liquid fuels for motors and engines sold in the country should be blended with locally-sourced biofuels components.
‘There is thus a need to impose a moratorium on the importation of molasses, and to revisit and review the policies and practices on the same, if only to ensure a mutually beneficial relationship between the local production and the importation of molasses.’
The MO stipulated that the temporary ban on molasses imports will remain in effect until December 31, 2025 unless otherwise shortened or extended by the agency.
During the period of the ban, the SRA said it would not accept applications for import clearance of molasses.
However, all pending applications filed with the agency before the MO are deemed exempted. Imported shipments of molasses already in transit or covered by a purchase order as of the effectivity of the MO are also not included in the ban.
The SRA noted that imported molasses arriving in the country after November 30 would be covered by the MO and would not be issued import clearances.
Any violation of the provision under the order would be a ground for the revocation or non-renewal of the SRA registration of the molasses importer, it added.