Date: 02-Mar-09
Country: US
NEW YORK - Pacific Ethanol, Inc, the largest marketer and producer of the alternative motor fuel in the West, said Friday it has temporarily suspended operations at two more distilleries, citing "extended unfavourable market conditions."
The company said in a release it had shut plants in Burley, Idaho and Stockton California. Both have the capacity to produce 60 million gallons per year.
Previously Pacific had said it temporarily shut its 40 million gallon per year plant in Madera, California.
Industry margins have hovered around break even or worse for months amid weak motor fuel demand and volatile prices for corn, the main input for ethanol.
Pacific could not be immediately reached about when the plants were expected to return. In the release, the company announced forbearance agreements with its lenders, and said it would keep trying to negotiate new loan terms. It said it would file papers with the Securities and Exchange Commission providing more details.
Experts have estimated more than 20 percent of ethanol production has been idled. This week Department of Agriculture chief economist Joseph Glauber said as much as 15 percent of ethanol production capacity will be idle during the 2009/2010 marketing year, based on the estimate of corn used to produce ethanol.
Pacfic Ethanol shares fell 1 cent on Friday on the Nasdaq to close at 34 cents, a new low.
(Reporting by Timothy Gardner; Editing by David Gregorio)
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