The enhancing role of molasses

At the present, the importance of molasses has been increasing. It is being utilized as a raw material in industrial food & beverage production around 1 million tons. In the meantime, Thailand is the no. 1 molasses exporter in the world which in the last 3 years; Thailand has exported averagely 1.4-1.5 million tons, valued averagely at over 50 million USD. Furthermore, the result from high fuel cost helps boost the consumption of molasses for ethanol production mixing with Benzene to become an alternative energy or gasohol which is Bt. 1.50/ liter cheaper than Benzene Octane 95 and also helps reduce petroleum import. As a result, the domestic demand of molasses has increased to 1.53 million tons / year.

As the fore mentioned factors, the government has an idea to ban molasses export to other countries in order to preserve for domestic consumption after the proposal by ethanol producer to increase the price of ethanol to be sold to petroleum distillation factory to be in line with the increasing price of molasses however, this issue, the side of sugar producers concern that if molasses cannot be exported, the price of molasses will be down and consequently affect the revenue of sugar and cane system which is indebted with sugar and cane foundation and financial institutions around  18 billion Baht. Presently, the role of molasses has increased noticeably in both domestic consumption and export in details as the following:

• Group of domestic consumption: as molasses comprise of minerals and nutrients, molasses has been used in continuing industries e.g. Liquor and alcohol production industry, animal feeding production industry, monosodium glutamate and vinegar etc. in total of 1 million ton of consumption in which the majority of its is used in liquor and alcohol production industry however molasses is used as raw material for ethanol production mixing with Benzene as an alternative energy called gasohol, resulted in increasing of domestic demand of molasses at around 1.53 million tons.

• Group of external consumption: now, Thailand is the world no. 1 molasses exporter followed by USA and Guatemala as the world’s no. 2 and 3 exporters respectively. The leading molasses importing countries from Thailand are Vietnam, South Korea, Japan, Taiwan and India which has total of 80% proportion of Thailand molasses export value and there is a notice that those countries rely mostly on Thailand in molasses import. Having Philippine, Indonesia and Australia etc. as the leading competitors in molasses export of Thailand in Asia, the value of molasses export of Thailand has been decreasing from 62.2 million USD in 2002 to 46.4 million USD and 41.6 million USD in 2003 and 2004 respectively. During the first 7 months of 2005, Thailand exports molasses of 1.02 million ton, 54.8 million USD in value which is 107.6% growth. In the meantime, the price of molasses has increased averagely at 53.84 USD/ton or rising 120.7% y-o-y.

There is a notice that the issue about molasses might be continuing in 2006 after the speculation that volume of sugar cane for domestic production is affected from drought same as 2005 which will pressure on government itself including sugar industry side as well. Hence, to solve this problem and prevent it not to repeat itself again in the future, government should discuss with ethanol entrepreneur, sugar cane farmers and sugar factories about the demand of molasses in long term at the same time with supporting on sugarcane production to be in line with each other to sustain the level of molasses domestic consumption without the restriction in molasses export to be forced.