The Philippines' bioethanol reference price continued to drop in December, touching Peso 56.49/liter ($1.14/l) during the month and down Peso 1.6/l from November, hitting a 15-month low, according to data released by the Philippines' Sugar Regulatory Administration Thursday.
The drop was mainly caused by sharply lower feedstocks cost from both molasses and sugarcane.
According to the report, the Negros molasses price fell Peso 229.49/mt from November to Peso 9,405.31/mt in December. The equivalent feedstock cost was Peso 40.23/l, the lowest level after January 2016 when it was Peso 38.57/l.
Meanwhile, the equivalent sugarcane feedstock cost was Peso 28.18/l, down Peso 2.25/l from November, equating to a sugarcane price of Peso 1,972.31/mt, which is Peso 157.96/mt lower month on month.
In comparison, the imported Philippine ethanol price had a roller-coaster month in December. The CIF Philippines fuel-grade ethanol marker jumped to a two-year high at $571/cu m December 13 and dropped again to $524/cu m December 30, the last trading day in the month, S&P Global Platts data showed.
As such, the domestic Philippines bioethanol price was around 218% higher than the imported fuel-grade ethanol price. The spread between the two continued to narrow down since September, when the domestic price was around 251% higher than the imported price.
US ethanol prices reached a peak in December, supported by huge import demand from Brazil, pushing up the export price to Asia.
Some of the Philippines' oil companies were heard trying to source cargoes from other regions like Vietnam and Australia when the US prices were frailly high, said market sources.
However, as the US market turned bearish during the start of 2017, amid high production levels, buyers in the Philippines might come back to the market and issue buy tenders for first-quarter 2017 delivery in January.
