Japan to increase imports of Thai ethanol

"Japan will increase imports of ethanol from Thailand, thanks to closer cooperation under the Jtepa and zero duties. Japan's latest policy to combine 3-per-cent ethanol with benzene will also increase that country's demand for ethanol," Deputy Commerce Minister Alongkorn Ponlaboot said.

Alongkorn met here with Sanae Takaichi, senior vice minister of Japan's Ministry of Economy, Trade and Industry, and Hiroyuki Ishike, vice minister of international affairs at the ministry.

He also talked with leading Japanese companies such as Sumitomo, Ryohin Keikaku and Mitsubishi about increasing imports of ethanol and investing in integrated biofuel plants in Thailand as a faster way to boost demand for biofuel crops.

"The investment will not only stimulate local production of ethanol, but also increase incomes for farmers," he said.

The move is aimed at enhancing bilateral cooperation under Jtepa and ensuring a market for Thailand's surging supply of ethanol.

Ethanol output now runs at 1.87 million litres a day from 13 plants and is expected to reach 4.12 million litres by 2011 as the number of plants expands to 22 next year, while domestic consumption is only 1.3 million litres.

Greater demand for ethanol is expected to raise the price of fuel crops, particularly cassava and sugarcane.

Brazil provides more than half of Japan's ethanol needs, trailed by Pakistan with 20 per cent of the market and Thailand with 12 per cent.

But Thailand's shipments of ethanol to Japan should rise sharply, thanks to Jtepa and closer cooperation as well as lower transportation costs than Thailand's rivals, Alongkorn said.

Japan uses about 840 million litres of ethanol a year.

Alongkorn also called for Japanese companies to step up technology transfers to Thai industry.

Jetsada Wongwatanasin, vice president of the Thai Ethanol Manufacturers Association, said that better cooperation with Japan would help reduce problems from an oversupply of fuel crops and ethanol as more production capacity comes on stream next year.

According to the Customs Department, 58.3 million tonnes of ethanol was sold overseas last year, with Japan taking 35.7 million tonnes, followed by Singapore, the Philippines, Taiwan and Korea.

Japan in turn called on Thailand to support trade cooperation among the Greater Mekong Subregion countries and with India and East Asia countries during the G-20 meeting next month as a way to pull through the economic crisis in the region.