July 22, 2015
Sugaronline | http://goo.gl/Tg9CPY
Domestic bioethanol prices in the Philippines have hit a four-year high in June, averaging PHP56.33/litre ($1.25/litre) as domestic raw sugar production sank to a two-year low, statistics from the Sugar Regulatory Administration showed this week, according to Platts.
Average bioethanol prices for the first half of June rose by a marginal PHP0.01/litre from H2 May to PHP56.42/litre, and but fell to Peso 56.24/litre for the second half of the month, recording an overall month-on-month rise of 0.3% in the monthly average price for June.
Raw sugar production saw an inverse trend over the same period, diving 95.6% from 3,822 tonnes on May 31 to 170 tonnes on June 28, while refined sugar production sank 40.5% from 14,786 tonnes on May 31 to 8,795 tonnes on June 28.
Sugar production is still continuing its downtrend, with raw sugar output having fallen 28% week on week to 122 tonnes in the week ended July 5.
Refined sugar production for the week ended July 5 was at 4,719 tonnes, down 46% from the previous week ended June 28.
Sugar production typically falls to a seasonal low during the milling season that runs from April up to June.
The last low seen in raw sugar production was August 2013, where only 51 tonnes of sugar were produced.
Similarly, ethanol production during the third quarter of the year traditionally dips to its lowest levels in the year.
The Q3 local monthly allocation volumes of domestically produced ethanol slumped 35.3% from Q2 to 39,700 cubic meters, prompting the Philippine government to waive its E10 ethanol mandate for premium grade 97 RON gasoline temporarily amid a shortfall in domestic production.
Domestic ethanol price trends had contrasted sharply against price trends in the international market where spot values have been on a broad-based downtrend.
The regional CIF Philippines benchmark had slumped 4.7% from a year-to-date high of US$563.33/cu m on May 7 to US$537/cu m assessed on July 20, tracking replacement costs in the US, Platts data shows.
Chicago ethanol terminal prices have been on a steady downward trek since May 18, where prices held at a year-to-date high of 169.50 cents/gallon, falling 10.6% to be assessed at 151.50 cents/gal on July 20.
The severe scarcity of sugar and ethanol in the domestic market on the back of a poorer-than-expected harvest has resulted in the Philippines halting all sugar exports in June.
The bulk of sugar exports heads to the US.
In June, the Philippine government announced 100% allocation of local sugar production for its domestic market with effect from the week ending May 31, effectively prohibiting any sugar exports out of the country, according to the sugar order No.1 1-B released by the SRA on June 1.