What the moratorium does
The Sugar Regulatory Administration (SRA) announced a moratorium on the importation of molasses through the end of 2025. The move, enacted after the Sugar Board issued Molasses Order No. 1 on September 30, aims to balance the interests of local sugarcane byproducts producers and molasses users while policy reviews are conducted.
Market context and recent trends
Imports and stock levels
In the last crop year, molasses imports rose by 28% to 853,285 metric tons. The SRA noted a molasses millsite stock balance of 303,961 metric tons as of the end of August, signaling a comfortable buffer for now even as the moratorium takes effect.
Domestic production and price movements
Domestic production increased about 20.5% year-on-year, reaching 1.176 million metric tons. This higher local output has contributed to more favorable stock levels. At the same time, the average price of locally produced molasses dropped to about PHP 12,000 per metric ton, roughly 30% lower than the PHP 18,000 per metric ton recorded in the previous crop year.
Scope, exemptions and enforcement
What the moratorium covers
Under Molasses Order No. 1, the SRA will no longer process clearances for the release of imported molasses while the policy review is underway.
Exceptions and transitional provisions
Applications filed prior to the order, or molasses already in transit, are not covered by the moratorium. This ensures ongoing shipments in movement before the policy change are not disrupted.
Duration and potential adjustments
The moratorium runs through end-2025 and may be extended or lifted depending on stock balance and other market indicators as the SRA continues its review.
Implications for ethanol and biofuel producers
Local sourcing and policy goals
The bulk of domestic molasses production feeds ethanol producers, which aligns with the biofuel law mandating the blending of locally produced ethanol in gasoline. The SRA is examining discrepancies between the volume of locally produced molasses used in alcohol production and the overall supply, a concern that motivated the moratorium in the first place.
Statements from the regulator
SRA Administrator Pablo Luis Azcona said the agency would assess why local molasses purchased from farmers remains unwithdrawn and unused, noting that there is no need to import while such a mismatch exists. He emphasized the importance of ensuring that ethanol and alcohol producers prioritize local feedstock, tapping higher-quality domestic molasses before turning to imports.
“We also need to see why the local molasses purchased from the farmers still remain unwithdrawn and unused. Hence, there is no need to import,” Azcona stated. “For the ethanol producers, we hope that their feedstock is really local as the biofuel law states, and for the alcohol producers, that they consume the local produce first, which is actually of higher quality, prior to resorting to lower quality imported molasses.”
What to watch next
Market watchers should track stock movements, withdrawals from mills, and any shifts in ethanol production to gauge whether the moratorium will remain in place beyond 2025 or be lifted to reopen molasses imports.
