Bangkok, Sept 14 – Tight domestic ethanol supplies and soaring world sugar prices could encourage Thai millers to start 2009/10 sugar crushing earlier than usual in mid-November, ethanol producers and traders said on Monday.
“If sugar millers start crushing earlier than expected, that could help ethanol producers get enough raw material and would help prevent an ethanol shortage in the final quarter of this year,” said Siriwut Siempakdi, president of the Thai Ethanol Manufacturing Association, to Reuters.
Demand for ethanol for gasohol, a blend of gasoline containing 10 percent ethanol, has outstripped supply due to a lack of the raw material, molasses, a sugar by-product, he said
Current ethanol demand stood at 1.2 million litres a day but production has dropped to around 900,000 litres due to a shortage of molasses, he said.
That has pushed domestic ethanol up to 24 baht ($0.71) per litre, some way above the reference price set by the government at 20 baht per litre, he said. The reference price effectively sets a floor for the ethanol market.
“We gradually ran out of molasses from April, when the crushing season ended,” Siriwut said.
The sugar-crushing season in Thailand, the world’s second-biggest sugar exporter, usually starts in late November or early December and runs until April.
This year, millers were likely to start crushing by mid-November in order to meet strong overseas demand and address the shortage of molasses, said a senior official at the Thai Sugar Millers Corporation.
A tonne of cane generates 45 kg of molasses. Thailand is expected to produce around 72-76 million tonnes of cane in the 2009/10 crop, which could produce an estimated 3.2-3.4 million tonnes of molasses.
Traders and millers said crushing could be brought forward to the second week of November as long as rain did not disrupt harvesting, as millers also wanted to produce sugar as soon as possible to meet overseas demand.
New York raw sugar prices, which set global trends, hit a 28-1/2-year high in early September at 24.85 cents per lb on the back of weak production in India, the world’s biggest sugar consumer. It settled at 21.21 cents per lb on Friday.
great post, thanks for sharing