Ethanol firms demanding higher prices

Exports an option to cover high costs

BANGKOK – Local ethanol producers have called on the Energy Ministry to force oil companies to raise the prices they pay, threatening to export all of their output if they can’t secure fair prices locally. An industry source said that if the oil companies continued buying ethanol, the feedstock for making gasohol as an alternative fuel for automobiles, from the producers below cost, they would no longer supply the oil companies but would instead focus on export markets after existing supply contracts expire.

Prices of molasses and cassava roots, the main raw material supply for ethanol production, have increased significantly, which has have also driven up the cost of ethanol production to the same level as for petrol.

Based on the current price of molasses at US5-107 per tonne, the ethanol ex-factory price should be 22-23 baht per litre after processing compared to 19-19.50 baht that oil companies currently pay.

As well, the price of cassava roots has doubled to four baht per kilogramme from last year. Though the cost of cassava is lower than for molasses, the complex production process makes the final production cost of cassava-derived ethanol the same as for the molasses-derived product.

Bangkok Post