Asia’s biofuel push to cut long-term sugar exports

A strong push from governments to use more crops such as sugarcane for fuel rather than food means Asia’s main sugar exporters, Thailand and the Philippines, will likely export less, analysts said. The impact of the change on prices is not clear, given the complex interaction among oil, ethanol and commodities generally, but the trend could portend shifts in global trade as sugar-importing countries look elsewhere. “Ethanol demand in Asian countries is basically determined by government energy policies,” said Ratneswary Balasingam, an analyst with the Frost & Sullivan consultancy. Most Asian countries are heavy oil importers, Thailand imports 64% of the oil it consumes, for example, with oil representing the single largest item in the country’s import bill. A liter of ethanol requires 14.3 kilograms of sugarcane, or 3.85 kilograms of molasses, to produce, according to Thailand’s Office of the Cane and Sugar Board. In the crop year ended in September, Thailand produced 3.2 million tons of molasses, of which some 1.3 million tons was used to make ethanol. (March 25, 2009)