Overview
The Sugar Regulatory Administration (SRA) of the Philippines has issued Molasses Order (MO) No. 1, placing a temporary ban on molasses imports through December 31. The move aims to give the government time to review policies and strike a balance between producers and users amid a surge in import arrivals and a sharp decline in millsite prices.
Why the ban and what the data show
The MO No. 1 moratorium responds to concerns that imported molasses are expanding the supply pool while local withdrawals remain constrained, potentially undermining price signals for farmers. The SRA reported that molasses imports for crop year 2024-2025 reached 853,285 metric tons (MT) as of Aug. 31, which is 28 percent higher than the average of the previous three crop years. Domestic production, meanwhile, grew 21 percent to 1.18 million MT by the end of August, up from 975,934 MT in the prior year, resulting in a millsite stock balance of 303,961 MT.
Prices and market balance
The agency noted that the average millsite price of domestic molasses has dropped to about ₱12,000 per MT, roughly 30 percent lower than last year’s ₱18,000 per MT. This decline raises questions about whether local molasses can be fully absorbed by the market and how much stock remains underutilized.
Role of molasses in biofuels
Molasses, a by-product of sugar milling, serves as the main feedstock for bioethanol production in the Philippines. Under Republic Act No. 9367 (the Biofuels Act), all liquid fuels for motors and engines must contain locally sourced biofuels. The SRA stressed that ensuring locally produced molasses is used for ethanol is essential, and the lack of a formal policy to guarantee local consumption prompted the temporary import pause.
Policy framework and next steps
MO No. 1 is a temporary measure, set to run through Dec. 31, with the possibility of extension or lifting depending on stock balances and market conditions. SRA Administrator Pablo Luis Azcona said the pause will allow regulators to examine why local molasses remains unwithdrawn and unused, and to verify that molasses used by ethanol producers is indeed locally sourced. He added that imports should only be a non-definite stopgap if there is a genuine local molasses shortage.
What changes with the moratorium
During the moratorium, the SRA will no longer accept applications for clearances for the release of imported molasses. However, pending applications filed before Sept. 30 remain exempt, as do imported molasses already in transit or covered by a purchase order. Molasses arriving after Nov. 30 would be covered by MO No. 1 and would not be exempt. Violations of MO No. 1 provisions may lead to revocation or non-renewal of an importer’s registration with the agency.
Implications for stakeholders
Industry players anticipate that the policy pause will push a more performance-based approach to molasses imports, prioritizing locally produced supplies and aligning feedstock with demand for bioethanol. Ethanol producers, sugar mills, and farmers could experience shifts in availability and pricing as officials refine the framework. In the near term, the government’s balance between supporting local molasses and meeting ethanol targets under the Biofuels Act will be closely watched.
Takeaway
The SRA’s molasses import moratorium signals a deliberate policy review aimed at safeguarding local production while ensuring that bioproduction objectives remain achievable. While temporary, the outcome of MO No. 1 could shape future import rules, price stability, and how the Philippines manages its sugar and biofuel sectors in the years ahead.
