Sacramento-based Pacific Ethanol Inc., a producer and marketer of low-carbon renewable fuels, said that its plants have entered into an agreement to purchase surplus raw beet sugar for use as ethanol feedstock.
The company said the purchase of 167 million pounds of surplus raw beet sugar to be blended with corn at PEI plants over the next year represents feedstock for approximately 12 million gallons of ethanol.
Company officials said the purchase equates to 4.1 cents a pound. At that rate, the purchase price is nearly $6.85 million. PEI said the purchase price represents a substantial discount compared with current and expected costs of delivered corn.
The sugar was purchased from the Commodity Credit Corp., a division of the U.S. Department of Agriculture, through its Feedstock Flexibility Program.
We expect this purchase of sugar to significantly lower raw material costs for the Pacific Ethanol plants and give us added flexibility and diversification in our feedstock sourcing, said Neil Koehler, PEI president and CEO. We built these plants to accommodate different feedstocks, and we are pleased to see the advantage this purchase creates for the company and its shareholders."
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