| RATCHABURI, Thailand, April 3
RATCHABURI, Thailand, April 3 Ethanol producers
in Thailand are stepping up efforts to find export markets after
government policy flip-flops have left domestic sales far below
expectations and raised doubts about ambitions to make the
country an Asian hub for the fuel.
Thailand can produce 3.26 million litres a day from 20
plants and the government wants to almost triple that in 10
years to 9 million.
"We aim to be a regional hub and we have the potential,
since we have plenty of raw materials, not only molasses, but
also tapioca, to supply the ethanol industry," said Nathie
Thabmanie, deputy director of the Energy Policy and Planning
Office, during a recent tour of an ethanol facility.
But domestic demand is just 1.2-1.3 million litres a day and
plants are running at half capacity as the government has
wavered on trying to prod motorists to use more gasohol, a blend
of ethanol and gasoline.
Producers have also been squeezed by government intervention
to help farmers, which has pushed up the price of tapioca chips.
"At this stage, domestic demand is still low," said Jutamas
Arunanondchai, an executive at Rajburi Ethanol Co Ltd, adding
the company wanted to export more to offload surplus production.
Jutamas said producers were targeting traditional ethanol
importers such as South Korea and Japan, which use it in the
liquor, chemical and biofuel industries. They were also banking
on an increase in demand from the Philippines as the government
there is trying to promote cleaner gasohol.
Thai exports tripled to 132 million litres in 2011 from 45
million in 2010, data from the Thai Ethanol Manufacturing
That followed a government move to cut fuel prices by
removing levies on some gasoline last August, giving Thai
drivers less incentive to switch to the cleaner fuel.
The government reimposed levies on some fuel prices in
January and has also announced a halt to the sale of pure
91-octane gasoline from October to reduce crude imports and
support the biofuel sector.
Even so, producers have become wary of increasing capacity
as the government would like.
"With high tapioca prices, we need to switch to molasses,
whose production is quite limited. At this stage, we really
don't know whether we should raise our ethanol output to the
target," said Siriwut Siempakdi, president of the Thai Ethanol
($1 = 30.8700 Thai baht)
(Editing by Alan Raybould and Matt Driskill)