Ethanol makers seek cassava

       Local ethanol manufacturers are looking to use more cassava as a raw material instead of expensive molasses in order to cut costs and compete with mainstream fuels, according to Sirivuthi Siamphakdee, president of the Thai Ethanol Manufacturers Association.
       Ethanol, which is used for blending with petrol to make gasohol, can be made from molasses, derived from sugar, or cassava. Only five of the 17 local producers use cassava and account for one-third of local ethanol capacity.The other ethanol producers also operating sugar businesses.
       Chalush Chinthammit, assistant vicepresident of Khon Kaen Sugar Plc (KSL),maintains that the rising price of ethanol has nothing to do with the sugar price hike as molasses output in the country remains sufficient for domestic demand.
       Mr Sirivuthi said ethanol price rises were a direct impact of the dry weather in India, the world's biggest cane producer, which reduced its sugar and molasses outputs. This led to a rise in overseas molasses demand from Thailand.
       "This is an opportunity for molasses exporters," he said."In the past they would sell molasses at low prices for distillers locally and overseas, but ethanol demand is rising, not only in Thailand but across Asia for green fuels."
       Ethanol producers have been the country's second largest molasses users since 2007.
       Local ethanol capacity is now 3 million litres per day and producers are paying US$145 per tonne for molasses,up from $115 a year earlier.
       Ethanol made from cassava costs 21 baht a litre while molasses-based variety is 27 baht, Mr Sirivuthi said.
       "To make sure gasohol prices can compete with petrol, we have to find out how to shift production to new materials at a lower cost," said Mr Chalush."However, ethanol producers are also concerned that if they use more cassava it would lead to rising prices of cassava too."
       Last year, Thailand produced 2.8 million tonnes of molasses, with 1.2 million consumed by distillers, the ethanol sector 600,000 tonnes, monosodium glutamate and animal feed 500,000 tonnes,and exports 500,000 tonnes.
       Jetsada Wongwatanasin, managing director of the Thai Sugar Ethanol Co said the company was now conducting a study to compare costs between molasses-based and cassava- or mixeduse ethanol to cut production costs.
       "We expect molasses prices would gradually decline at the beginning of the new harvesting season in December and stay low until April, if the sugar output shortage is not more severe,"said Mr Jetsada.
       Thailand's sugar output in the 2009-10 harvest is forecast to rise to 75 million tonnes from an estimated 67 million this season.