Sugarcane farmers brace for increased ethanol demand

Sugarcane farmers all over the country are scouting for new areas where they can plant more sugarcane in anticipation of increased demand for the crop brought about by the country’s thrust to go into ethanol production.

This as sugarcane planters, led by the Confederation of Sugar Producers Associations (Confed), urged the Senate to fasttrack the passage of the Biofuels Act, which mandates the blending of five-percent ethanol to gasoline within two years from the passage of the law and increasing the blend to 10 percent upon the creation of the National Biofuels Board which will regulate the ethanol industry.

Sugarcane in the Philippines is currently planted on 400,000 hectares of land, the bulk of which is in Negros Occidental. This cropyear, the country expects to produce 2.018 million metric tons of sugar. This is expected to increase to 2.15 million metric tons which could even hit a high of 2.2 million tons due to good prices.

Confed president Reynaldo Bantug said additional uses for sugarcane will mean better profits for sugar farmers.

The head of the country’s largest aggrupation of sugar farmers also revealed that sugar planters are already scouting for expansion areas to plant sugarcane needed for ethanol production.

A five-percent ethanol blend requires 160.67 million liters of ethanol. By 2012, when the mandated blend is at 10 percent, the country will need an estimated 428.04 million liters of ethanol.

Since sugar is the preferred feedstock for ethanol production, experts say it will not be difficult to provide sugarcane for ethanol use but existing sugar mills and refineries in traditional sugar districts such as Negros Occidental cannot accommodate the bigger demand.

According to the Philippine Sugar Millers Association, specific projects for fuel ethanol production will require the opening of new cane areas in Northern Luzon, Mindoro and Southern Mindanao. Some of the identified possible areas for sugarcane-for-ethanol production include Kalinga, Cagayan, Isabela, Masbate, Palawan, Bohol, Agusan del Norte, Agusan del Sur, Lanao del Norte, Maguindanao, South Cotabato, and Saranggani.

Investors are waiting for the passage of the Biofuels Bill. There are also several distillery companies that are willing to convert their excess capacities and put up facilities such as $500,000-dehydrators that would enable them to produce anhydrous alcohol or ethanol that would be blended with gasoline.

Bukidnon Rep. Miguel Zubiri, who sponsored the Biofuels Bill in the Lower House said there are several ethanol plants that are in various stages of construction in anticipation of the enactment of the bill. He said the group of British firm Bronzeoak Phils. and Bukidnon Sugar Milling Corp. are putting up a fuel ethanol plant in Bukidnon in the next three years. Bronzeoak is involved in the ethanol facility in San Carlos, Negros Occidental.

For his part, Negros Oriental Rep. Herminio Teves revealed that an integrated plantation, distillery and co-generation plant for ethanol using sugarcane will be operational within two years in his province. Behind the P2-billion project is Tamlang Valley Agricultural Development Corp., 65 percent of which is owned by Tau Commodities and Teves’ family and the remainder by the government.

In Brazil, Teves said 50 percent of sugarcane plantations had been converted to ethanol plantations and distilleries, while 30 percent have been converted in Thailand and 20 percent in Australia.

The International Sugar Organization (ISO) has urged Philippine sugar producers to invest more to increase production and meet the anticipated increased global demand for ethanol. ISO economist Lindsay Jolly earlier said the volatile prices of fossil fuels will place more pressure on the price and supply of sugar in the world market, as the cheaper ethanol is now being used as an alternative fuel.

The mandatory blending of 10-percent ethanol with gasoline is expected to result in foreign exchange savings of as much as P32 billion a year from importing less crude oil.