The Philippines' domestic bioethanol reference price fell to Pesos 47.44/liter (96 cents/liter) in May, down 21% year on year, according to data released by the Sugar Regulatory Administration on Wednesday.
The reference price is calculated using transportation costs and the average cost of two major feedstocks for ethanol production, molasses and sugarcane.
The domestic bioethanol price largely depends on the change in feedstock costs.
According to the report, Negros molasses fell Pesos 510.18/mt from April to Peso 6208.75/mt in May, resulting in a lower equivalent feedstock cost of Pesos 27.18/l, which is the lowest since August 2014.
The equivalent sugarcane feedstock cost in May was Pesos 23.11/l, equating to a sugarcane price of Pesos 1617.82/mt, the lowest since January 2013, and down Pesos 30.53/mt month on month.
In comparison, the monthly average CIF Philippine fuel ethanol price was $481.44/cu m in May, S&P Global Platts data showed.
The domestic bioethanol price was nearly double that of the imported material. Although the spread has been narrowing since September 2016, imported ethanol remains more competitive.
Demand was sluggish for imported cargoes due to higher production of domestic ethanol.
The Philippines sugarcane sector outperformed in the current crop year (September 2016-August 2017), according to the Sugar Regulatory Administration.
As of May 28, sugar production hit 2.33 million mt, higher than the government's forecast.
Huge imports of high-fructose corn syrup also put pressure on domestic sugar prices.
