Philippines’ largest ethanol plant seen resuming operations

The country may restart ethanol production next crop year as declining local demand for sugar has resulted in the build-up of excess sugar stocks, according to the Sugar Regulatory Administration (SRA).

Rosemarie Gumera, SRA manager for policy and planning, said in a phone interview on Monday that it was possible that San Carlos Bioenergy Inc. in Negros Occidental, the country’s first and largest ethanol plant, would resume operations in September as the price of local sugarcane, the raw material for bioethanol, continued to decline.

San Carlos suspended its operations due to high sugarcane prices in crop year 2010-2011. As a result, the Philippines’ bioethanol production in 2010 dropped to a mere 9.89 million liters from 23.28 million liters in 2009.

“Declining sugar prices are very encouraging for ethanol producers. The prices of sugarcane, which is dictated by the market price of sugar, has significantly dropped from as high as P2,000 to about P1,200 per bag,” Ms. Gumera said in a telephone interview.

Should San Carlos resume operations, Gumera said the diversion of some sugarcane stocks to bioethanol production would ease the oversupply in sugar.

“As of today, raw sugar stocks increased by 153 percent from last year while stocks of refined sugar built up by 35 percent,” Gumera said.

As of May 29, sugar output from mills has hit 2.279 million metric tons, exceeding the initial target of 1.96 million MT for 2011.