London (Platts)--4Jul2007

Germany's Verbio Group confirmed Wednesday that it had reduced its
production of bioethanol recently as prices in Rotterdam were unattractive.
"We are running both plants but not at 100%," the source said. We are using up
old feedstocks instead of buying new ones at expensive prices, the source
continued.
     Verbio operates two bioethanol production units in Germany with a
combined capacity of 300,000 mt/year.
     Sources were also speculating as to whether production in southern Europe
had been reduced with one source saying that he thought at least one plant
operated by Spain's Abengoa Bioenergy had been stopped completely and another
source saying that a second of the company's plants may be stopped soon as
well. Abengoa Bioenergy did not respond to enquiries.
     Prices on a FOB Rotterdam basis were quoted by Platts June 29 at
Eur525.50/cu m ($715.60/cu m) which sources in both France and Germany said
"had no resemblance to contract prices." A source in France said that in the
closed French market, prices were "around Eur600-620/cu m," with FOB
Lillebonne prices, calculated using last year's wheat prices, pegged at
Eur580/cu m.
     Verbio confirmed that it was offering product last week at Eur550/cu m
FOB Rotterdam but would not confirm whether that level had traded.
     BP confirmed having bought ethanol this week however at Eur531/cu m for
1,100 cu m for loading July 3-5 on a FOB Antwerp basis and Eur529/cu m for
2,000 cu m on a FOB Rotterdam basis for loading July 10-31. One of the
counterparties would not confirm and the other wanted to remain private and
confidential.
     An ETBE producer also confirmed selling at around the same level or
slightly higher. Further details could not be obtained. 
--Oliver Laws, oliver_laws@platts.com