Export of ethanol from sugarcane molasses fetches $220m per season

[Naveed Yaseen]

By Parvaiz Ishfaq Rana
KARACHI, Nov 7: The country earned around $220 million on export of little over 0.3 million tons of alcohol up to Oct 31 while another 50,000 tons of alcohol is expected to be exported during the November-December period.

The country produced around 2.661 million tons of molasses during 2007-08 sugarcane crushing season and on adding 50,000 tons of carry-over stocks at terminals and an equal quantity at the mills, the total available stocks of molasses stood at 2.761 million tons, industry and export sources said.

Since conversion ratio of molasses to alcohol stands at 5:1 (five tons of molasses required to produce one ton of alcohol), the estimated requirement of distilleries stood at 1.650 million tons for molasses.

Sources said alcohol prices in the world market remained on the upper side during 2008 which enabled the country to earn more foreign exchange through exports. After touching around $800 per ton, alcohol prices receded back to $600 per ton.

Consequently, on exporting around 312,000 tons up to October 31, 2008, at an average price of $725 per ton, the country managed to earn around $220 million through export of alcohol.

According to industry sources, the country exported around 1,90,585 tons of alcohol last year (2006-07) and earned $112 million at an average price $550 per ton.

With advent of each sugarcane crushing season, the country had been exporting millions of tons of molasses at throwaway prices to European countries and Japan, Mohammad Kasim Hashim, chairman, Terminal Association of Pakistan (TAP), said.

However, for the last several years it is being converted into three grades of alcohol i.e. fuel or anhydrous, neutral or extra neutral (ENA) and industrial or rectified ethanol (REN), Mr Hashim said.

Presently around 16 distilleries are operating in the country at 60 per cent capacity, he added.

The TAP chief further stated that as more and more distilleries are coming up every year, there has been a constant rise in export of alcohol.

During 2004, the country exported 99,711 tons of alcohol, but in the subsequent year, the figure jumped to 122,104 tons.

After exporting around 255,812 tons last year (2007), the country is now poised to export a record volume of 350,000 tons of alcohol this year (2008), he maintained.

He said around 9,000 tons of alcohol had been exported this year through ISO containers which were the latest method for haulage of liquid cargo.

Giving some details, Mohammad Kasim Hashim said that ISO containers/tank are filled with alcohol from distilleries and loaded on trailers for direct loading on to ships.

These tanks are air-tight and expensive because they are first cleaned by steam and are used only after survey is carried out.

He, however, said that the industry is encouraging use of ISO tanks because they are fast for haulage of liquid cargo and are also easy to handle.

Presently they are mostly reaching Dubai, but in coming years will encourage their use for Middle East and Africa, he added.

Export of alcohol is being hindered by congestion at the Karachi Port where tanker ships have to wait for their turn for several days, resulting in heavy demurrage charges.

This is also draining out valuable foreign exchange because demurrage is paid in dollars, TAP secretary Sultan Ahmed complained.

http://www.dawn.com/2008/11/08/ebr2.htm