Background: Why the import ban was issued
The Sugar Regulatory Administration (SRA) has announced a temporary moratorium on molasses imports under MO No. 1, effective immediately and lasting through December 31, as it conducts a policy review aimed at aligning local production with user needs and market realities.
As of August 31, imports for the 2024-2025 crop year reached 853,285 metric tons (MT)—roughly 28 percent higher than the average of the three preceding crop years—despite a robust domestic harvest. The Philippines reported a 21 percent year-on-year rise in production to 1.18 million MT by the end of August, compared with 975,934 MT in the prior year. The surge in imports has consumed a portion of the domestic molasses stock, leaving a millsite stock balance of 303,961 MT, the SRA said.
The industry has long argued for tighter control on molasses imports after a decline in local molasses withdrawals and a corresponding drop in domestic molasses prices, which has placed pressure on growers and sugar mills alike.
Policy mechanics under MO No. 1
What the moratorium covers
Under MO No. 1 dated Sept. 30, the SRA will no longer accept new applications for clearance to release imported molasses. The objective is to give the government time to review existing policies and craft a framework that fosters a mutually beneficial relationship between local production and imports of molasses.
Exemptions and timing
Pending applications filed with the SRA before September 30 are exempt from the moratorium. Imported molasses already in transit or covered by a purchase order also remains exempt. However, molasses arriving after November 30 would be covered by MO No. 1 and thus would not be exempt from the moratorium.
Imports vs production: market dynamics
The bulk of molasses production in the country is used as a feedstock for bioethanol, aligning with the Biofuels Act (RA 9367), which requires locally sourced biofuels in liquid fuels for motors and engines. Yet, the current stock and price dynamics have raised questions about how imports should be calibrated against domestic supply. The SRA reported a drop in the average millsite price of domestic molasses to ₱12,000 per MT, roughly 30 percent lower than last year’s ₱18,000 per MT, exacerbating pressure on farmers and millers.
Implications for the biofuels sector and stakeholders
Officials emphasize that there is no concrete policy guaranteeing that local molasses will always be prioritized over imports. SRA Administrator Pablo Luis Azcona stressed that the moratorium provides an opportunity to verify that molasses used by ethanol producers is indeed locally sourced and to examine why local molasses withdrawals remain below expectations. He described imports as a potential “non-definite stopgap” only if there is a genuine shortage of locally produced molasses.
One expected outcome is the development of a performance-based policy for molasses imports, aligning with the country’s biofuels framework and ensuring a stable supply chain for the ethanol sector without undermining local farmers’ interests.
What happens next: implementation and outlook
During the moratorium, the SRA will not accept new clearance applications for imported molasses. The agency will review stock balances, withdrawal rates, and the effectiveness of current policies, with a view toward a clearer, data-driven policy framework. Extensions or lifting of MO No. 1 will depend on stock balance dynamics, industry uptake, and demonstrable improvements in prioritizing locally produced molasses.
Bottom line for stakeholders
For cane planters, ethanol producers, and sugar refiners, the pause on molasses imports signals a recalibration toward balancing domestic availability with market demand. The SRA’s actions aim to protect local producers while ensuring the biofuels sector remains adequately supplied with feedstock, in line with the country’s broader agricultural and energy goals.
