Philippines official urges ethanol investment to boost sugar demand as free-trade pact threatens commodity prices

In the Philippines, a prominent Senator urged local businessmen to invest in ethanol production to counter an influx in low-cost sugar that will result from the reduction in sugar tariffs in 2010 under the AFTA agreement. The sugar tariff is scheduled to drop from 65% to 5% in 2010. Lack of local investment has prevented the commencement of ethanol plant construction in the Philippines, although ethanol fuel is widely seen as a means of propping up sugar demand and prices.

Implementation of the Asian Free Trade Agreement is expected to bring a flood of low-cost Thai sugar to Philippine markets. Efforts to raise $42 million for a sugar ethanol plant have run into difficulties.

Philippine National Oil Co.-Alternative Fuels Corp. has also been strongly pursuing the development of jatropha-based biodiesel.

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