The Philippines' domestic bioethanol reference price weakened for the fifth consecutive month in January to Peso 56.01/liter ($1.12/liter), down Peso 0.48/liter from December to a 16-month low, according to data from the Philippines' Sugar Regulatory Administration.
The price is calculated by adding the average feedstock cost to conversion cost. With conversion cost unchanged at Peso 22.29/liter, the drop was mainly caused by sharply lower feedstock costs from both molasses and sugarcane.
According to the report, the Negros molasses price fell Peso 209.09/mt in January to Peso 9,196.22/mt. The equivalent feedstock cost was Peso 39.37/liter, a one-year low.
The equivalent sugarcane feedstock cost was Peso 28.07/liter in January, down Peso 0.11/liter month on month, the lowest since March 2015 when it was Peso 26.93/l.
The imported Philippine ethanol market softened in January after tightness in December. The average CIF Philippines fuel-grade ethanol marker in January was $499.85/cu m, S&P Global Platts data showed, which means the domestic Philippine bioethanol price was 224% higher than the imported fuel-grade ethanol price.
The spread between the two had been narrowing since September when the domestic price was around 251% higher than the imported price.
Most Philippine oil companies have bought cargoes for first quarter of 2017, with four deals said to have been done in January.
With insufficient raw materials available for ethanol production in the country, there was talk that domestic supply could meet less than half of demand in 2017.
