German bioethanol producer CropEnergies says it will suspend production at its British unit Ensus because of low bioethanol prices and the strong British pound against the euro.
CropEnergies said the shutdown is expected to lead to restructuring costs of EUR40 million (US$45.5 million) for 2014-15.
"This decision has been made due to the current difficult situation in the European bioethanol market which the dramatic drop of oil prices in the last few months has exacerbated," CropEnergies said.
The company said the production plant will be brought back online as soon as market conditions allowed. The plant is one of Europe’s largest bioethanol plants, with annual production capacity of 400,000 cubic meters of bioethanol and 350,000 tons of dried distillers grains with solubles. At full production, the plant can consume more than 1 million tons of feed wheat annually. This means the shutdown could free up more of the country’s wheat for export.
"British feed grain is currently in strong demand in the Middle East and Asia following the export restrictions imposed by Russia and Ukraine and I think the British will find a ready market for their wheat supplies," one German grain trader said in a report.
Bioethanol prices has reached a record low of EUR417 per cubic meter on January 15, down from EUR470 one year ago.
UPDATE 2-CropEnergies suspends bioethanol production in Britain