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Sugar Asia Conference Bangkok, Thailand May 16-17, 2012

The Philippine Sugarcane Industry “Challenges & Opportunities”. Sugar Mill. Bioethanol. Cane Farms. Sugar Regulatory Administration Department of Agriculture Philippines. Presenters: Jose Rojo G. Alisla Rosemarie S. Gumera. Sugar Asia Conference Bangkok, Thailand

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Sugar Asia Conference Bangkok, Thailand May 16-17, 2012

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  1. The Philippine Sugarcane Industry “Challenges & Opportunities” Sugar Mill Bioethanol Cane Farms Sugar Regulatory Administration Department of Agriculture Philippines Presenters: Jose Rojo G. Alisla Rosemarie S. Gumera Sugar Asia Conference Bangkok, Thailand May 16-17, 2012

  2. Profile of the Philippine Sugarcane Industry

  3. MAP OF PHILIPPINE SUGAR MILLS & BIOETHANOL DISTILLERIES Legend Green Future Innovations CAGAYAN / ISABELA 11,000 HECTARES CAGAYAN Bioethanol Distilleries Sugar mills Mills with annexed refinery Major sugar ports Bioethanol production areas Bioethanol target areas Pampanga Bioenergy 7,000 HECTARES LUZON (7 mills + 4 refineries + 1 distillery) TARLAC N PAMPANGA Cavite Biofuels 7,000 HECTARES MANILA E CAVITE W BATANGAS Batangas Sugar CAMARINES SUR S VISAYAS (18 mills + 7 refineries + 3 distilleries) MASBATE SAMAR NEGROS OCCIDENTAL CAPIZ PANAY CanlaonAlcogreen 5,000 HECTARES Lopez ILOILO Sa LEYTE CEBU NEGROS SAN CARLOS 5,000 HECTARES BOHOL SURIGAO DEL NORTE Tolong NEGROS ORIENTAL PALAWAN AGUSAN DEL NORTE SURIGAO DEL SUR BUKIDNON MISAMIS OCCIDENTAL LANAO DEL NORTE MINDANAO (4 mills + 3 refineries) ZAMBOANGA DEL NORTE MISAMIS ORIENTAL NORTH COTABATO ZAMBOANGA DEL SUR Davao SOUTH COTABATO DAVAO DEL SUR

  4. Distribution of Philippine Cane Areas, CY 2011-2012 17,000 has. Total Cane Area – 420,000 hectares

  5. 24% 18 % 12 % 16 % 15 % 15 % Farm Sizes, Hectares

  6. Philippine Sugarcane Areas for the Past 10 Crop Years

  7. Philippine Cane & Sugar Production for the Past 10 Crop Years Million MT Crop Years

  8. Philippine Farm Productivity for the Past 10 Crop Years

  9. Philippine Sugar Production & Trade for the Past 10 Crop Years

  10. HISTORICAL PHILIPPINE RAW SUGAR COMPOSITE PRICES * As of April 2012

  11. Bioethanol Production, Liters In 2012, around 486 million liters bioethanol is required under the 10% mandated blend, however, only 4 distilleries are operational with a combined annual rated capacity of 133 million liters.

  12. Power Situation in the Philippines 2010 Power Generation by Plant Type, GWh Gross Power = 67,743 GWh

  13. Total Electricity Sales in the Philippines, 2009 vs. 2010 GWh

  14. 2010 Installed and Dependable Capacity, Philippines MW

  15. CHALLENGES • Sugar Tariff Schedules and Implications • Maintaining Profitability in the Philippine Sugarcane Industry • Performance of Philippine Sugar Mills and Deterrents to Mill Improvements • Implementation of the Biofuels and Renewable Energy Laws

  16. Sugar Tariff Schedules and Implications • AFTA – CEPT Tariff Schedule: • - 38 % • - 28 % • - 18 % • - 10 % • - 5 % • Implications: • Entry of imported sugar would threaten • the livelihood of the 62,000 farmers • and 600,000 workers of the • Philippine sugarcane industry • Entry of imported sugar will push • downwards the millsite price of locally- • produced sugar

  17. Maintaining Profitability in the Philippine Sugarcane Industry • Fragmented farms due to the Comprehensive • Agrarian Reform Law • Small farms have low farm productivities • Small farmers have no financial capability in • procuring the necessary farm inputs • Lacks infrastructure support from government

  18. Performance of Philippine Sugar Mills and Deterrents to Mill Improvements • Less efficient sugar mills, low capacities • Majority of Philippine mills need to be • rehabilitated and upgraded • Lack of financial package from government • financing institutions

  19. Implementation of the Biofuels and Renewable Energy Laws • Uncertainty in the buying price of bioethanol – • how successful is the implementation of the price • index of locally-produced bioethanol • Feed-in-tariff rate for biomass is still pending • with the Philippine Energy Regulatory Commission

  20. OPPORTUNITIES • Prospects for Cane Expansion Areas • Access to Japan Sugar Market thru PJEPA • Creating Greater Value for Sugarcane • Bioethanol Production • Power Cogeneration • Increased Farm Mechanization Due to Labor Supply Shortage • Sustaining Domestic Requirement and Maintaining World and US Quota Exports

  21. Prospects for Cane Expansion Areas • Most Philippine sugar mills are underutilized due to the lack of cane supply • Development of expansion areas for sugarcane to supply the feedstocks • for bioethanol fuel Access to Japan Sugar Market thru PJEPA • Proposal of the Philippine gov’t under the Phil.-Japan Economic Partnership • Agreement (PJEPA) for a TRQ of 150,000 MT raw cane sugar with an • in-quota rate of 4.415 yen per kilo and 1,000 MT of muscovado sugar • with an in-quota rate of 17.65 yen per kilo.

  22. Creating Greater Value for Sugarcane • Product diversification or development of alternative or • high-value products • Production of organic sugar • Turning a community of small cane farmers into an • agribusiness enterprise Bioethanol Production • Thirteen more distilleries with an annual capacity of • 30 million liters are required to meet the volume requirement • of the 10 % mandate of bioethanol blend

  23. Power Cogeneration • Existing power generating capacity of all the sugar mills in the • Philippines is 200 megawatts; • Given the right investment environment, the boilers and power • generators of such mills can be upgraded up to 600 megawatts • making available 400 megawatts for power cogeneration • The Philippines is currently experiencing power shortages and • the power generated by the sugar mills could help solve the • country’s problem on power deficit

  24. Increased Farm Mechanization Due to Labor Supply Shortage • Farm laborers in the Philippines became scarce and the • new generation are no longer inclined in farming but • preferred to work overseas • The shortage of farm labor triggered the shift to farm • mechanization in the Philippines

  25. Sustaining Domestic Requirement and Maintaining World and US Quota Exports • The Philippines has to be a net exporter of sugar by 2015 in • order to be in the offensive move rather than be flooded with • imported sugar • More opportunities for investment in mill • modernization, infrastructure and farm and equipment are • seen to flourish in the Philippines given the need to be • competitive in world sugar production

  26. Thank You Website : www.sra.gov.ph Email : srahead@sra.gov.ph info@sra.gov.ph Tel. No. : (632) 929-3633 (632) 455-2135

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