CCC sells sugar under FFP, announces new purchase invitation

By Erin Voegele | November 26, 2013

On Nov. 22, the USDA’s Commodity Credit Corp. announced the results of an offer made on Nov. 14 to sell sugar to bioenergy producers under the Feedstock Flexibility Program. The CCC also announced a new invitation to sell the remainder of its recently acquired sugar inventory under the FFP and for other non-food uses. Under the FFP, sugar sold to bioenergy producers must be used to manufacture, ethanol, butanol, or other marketable biofuels.

The Nov. 14 offer to purchase sugar under the FFP was the third such offer made this year. A total of 593 million pounds of sugar were offered for sale to bioenergy producers under the invitation, including 503 million pounds refined beet sugar, and 90 million pounds of raw cane sugar.

According to information released by the CCC, three ethanol producers purchased a combined 433.5 million pounds of beet sugar through the offer for a combined total of nearly $11.33 million. The bid price ranged from 3.81 cents per pound to 2 cents per pound. Aventine Renewable Energy Inc. purchased 270.5 million pounds of sugar, while Central Indiana Ethanol purchased 60 million pounds and Pacific Ethanol Holding Co. purchased 103 million pounds.

A statement released by Pacific Ethanol notes that this was the second purchase agreement it made with the CCC to purchase sugar this year. Combined with the company’s October purchase, it bought 270 million pounds of feedstock, which is enough to produce an estimated 20 million gallons of ethanol. According to Pacific Ethanol, both purchase have been priced at a substantial discount to current and expected costs of a comparable amount of delivered corn.

"We are pleased to have finalized a second agreement with the USDA to purchase sugar for biofuel production. This transaction is consistent with our goals of diversifying our feedstock, lowering production costs and producing low-carbon ethanol,” said Neil Koehler, president and CEO of Pacific Ethanol. “This week we began blending sugar with corn at our Magic Valley facility and plan to expand this program to both our Columbia and Stockton facilities over the next two months."

In its fourth invitation to purchase sugar under the FFP, the CCC has reduced the minimum quantity for bids to 5,000 tons. Sugar offered under the invitation can be sold for use in bioenergy production or for other non-food uses, such as pet food or to livestock and bee feed suppliers.

The CCC is offering 159.5 bounds of sugar for sale under the fourth invitation, including 69.5 million pounds of refined beet sugar and 90 million pounds of raw cane sugar. Offers must be received by Dec. 11 at 1:30 p.m. central time.