What prompted the moratorium
The Sugar Regulatory Administration (SRA) announced a moratorium on the importation of molasses through the end of 2025. The move, formalized as Molasses Order No. 1 issued on September 30, aims to review policies governing molasses imports to balance the interests of local producers and users amid shifting market dynamics.
The rationale and key data
Officials cited several factors driving the decision. Last crop year saw a 28% rise in molasses imports compared with prior years, totaling 853,285 metric tons. At the same time, domestic sugarcane byproduct production surged—up about 20.5% to 1.176 million metric tons—contributing to a robust millsite stock balance of 303,961 metric tons as of August’s end. With more molasses produced locally, the SRA saw less need to rely on imports to meet downstream demands.
What the order does
The moratorium means the SRA will no longer process clearances for the release of imported molasses. Notably, however, applications already filed prior to the order and those for molasses already in transit at the time of the order are exempt from the moratorium. The timeline is explicitly tied to year-end 2025, but SRA indicated the measure could be extended or lifted depending on the stock balance and market conditions.
Market dynamics driving the policy
Stakeholders had flagged a “noticeable decrease” in the withdrawal of locally sourced molasses from mills, coupled with a drop in domestic molasses prices. Current prices average around P12,000 per metric ton, roughly 30% lower than the previous crop year’s average of about P18,000 per metric ton. The pullback in local molasses demand and the increased stockpile prompted the regulator to reexamine whether imports were necessary to support ethanol production and other users.
Implications for ethanol and biofuels
Most domestic molasses goes to ethanol producers, who, in turn, supply feedstock to oil companies required by the country’s biofuel law mandating blends of locally produced ethanol in gasoline. The SRA’s stance raises questions about supply chains: is ethanol production truly leveraging local molasses, or are imports providing the necessary margin of security? SRA Administrator Pablo Luis Azcona emphasized the need to understand why ethanol and alcohol producers source their molasses and to ensure local molasses—per the biofuel framework—is the preferred feedstock before resorting to imports.
What to watch next
Administrators will closely monitor the molasses stock balance, domestic production, and actual withdrawal patterns from mills. If the 303,961 MT stock level remains ample and local consumption stays strong, the moratorium could extend or become permanent. Conversely, if stock levels dwindle or price signals change, the policy might be revised to prevent supply disruptions for ethanol and other molasses users.
Industry and farmer considerations
For sugar industry stakeholders, the moratorium presents both a risk and an opportunity: it protects local producers from import competition while encouraging them to optimize the use of homegrown molasses. For farmers, the overarching goal is to ensure fair compensation and predictable demand for their molasses through mills, while maintaining the integrity of the biofuel supply chain that supports the Philippines’ energy goals.
Bottom line
As the SRA reviews policy to balance the needs of producers and users, the molasses moratorium through 2025 stands as a measured approach in a shifting market. The regulator’s continued watch on stock levels and consumption will determine whether this policy remains in place, evolves, or is lifted in the near future.
