Sugar farmers seen benefiting from higher demand after biofuel ruling
The Philippine government’s order to raise biofuel content in diesel and gasoline could benefit sugarcane farmers, says SRA Administrator. With ethanol demand set to rise, USDA projects a 8% increase in ethanol consumption to 682 million liters. The DoE mandates a 20% bioethanol blend, aiming to cut gasoline prices by P3.21/liter. Sugarcane production for 2023-2024 reached 21.45 million MT, but El Niño threatens next season. Molasses supply rose to 1.08 million MT.
A GOVERNMENT order to increase the biofuel content in diesel and gasoline may benefit the sugarcane industry, the Sugar Regulatory Administration (SRA) said.
“It will bring more opportunity for our sugarcane farmers, as there will be bigger demand for cane or molasses,” SRA Administrator Pablo Luis S. Azcona said via Viber, referring to two ingredients in bioethanol production.
According to the US Department of Agriculture (USDA), Philippine fuel ethanol consumption is expected to increase by 8% this year, amounting to 682 million liters.
On Monday, the Department of Energy (DoE) required oil companies to offer gasoline with 20% bioethanol content.
“The increase in blend will also allow ethanol plants to maximize production using local feedstock,” Mr. Azcona added.
The USDA also projected fuel ethanol imports into the Philippines to increase to 280 million liters, servicing about 42% of demand.
“Also, the increase in blend will lower the price of gasoline and diesel. The five million people dependent on the sugarcane industry use fuel for farming and in their daily life,” he added.
The DoE said that the increase in the bioethanol blend could bring down gasoline pump prices by P3.21 per liter.
The SRA reported that milled sugarcane amounted to 21.45 million metric tons (MT) during the 2023-2024 milling season.
The USDA also estimates that sugarcane production will hit 21.5 million MT this year.
However, Mr. Azcona said earlier that El Niño has affected the sugarcane planted for the next harvest season.
It added that the supply of molasses was 1.08 million MT, higher than the 961.9 thousand MT the previous year.
The DoE will also begin increasing the biodiesel blend to B3 (3% coco oil content) by October. This begins the government’s plan to raise the blend to B5 (5%) in the next five years. — Adrian H. Halili
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