Deadline is near for bioethanol wheat contracts

Wheat growers wanting to supply Europe’s largest bioethanol producer, Abengoa, have until 2 May to sign up part of their crop, says Harlow Agricultural Merchants, which is providing the contracts.

The Spanish company requires feed wheat at 15% moisture, 72-74kg/hl specific weight and a maximum impurity level of 2%.

Contracts are worth about 67/t, which includes the energy crops payment of €45/ha.

Abengoa is a new consumer of UK wheat, but already has four plants in Spain running on maize, wheat and barley, which have a joint requirement for 3000t of cereals a day, says Harlow’s Stuart Attridge.

“We have heard a great deal about the potential of biofuels, but seen very little action to date in the UK.”

The company has been producing bioethanol in Spain since 1998 and has four plants in America, he adds.

“A new plant in the north of Spain is coming on stream this year, so demand is rising.

Much of their cereals requirement has to be imported.”

Ignacio Canaveral Ladron de Guevara, head of cereals procurement at Abengoa, says forward buying of grain to 2007 is needed to honour existing fuel contracts.

“The biofuels industry is growing very fast.

In Spain, we already have 6000 growers, with 35,000ha of cereals committed to bioethanol production.”

Abengoa’s production will need to increase by 60% to meet the EU’s fuel inclusion rates of 5.75% by 2010, he calculates.

“We believe that the energy crops payment is going to rise to €80/ha next year.

Growers should be looking hard at the energy crops opportunity.”

Abengoa has set up a trading company, Ecoagricola, which will be buying wheat from the existing trading structure in the UK.

Growers will be paid directly any time from 30 days after delivery in euros or sterling, he adds.

The company is offering €93/t (£64.63) for payment 180 days after collection or €91.20/t (£63.30) for payment 30 days after collection. The €45 energy crops subsidy adds £3-4/t, depending on yield.

“Next year, we hope to introduce longer-term contracts and will investigate paying UK growers to store it,” says Senor de Guevara.

He is hoping to secure 10,000-15,000t of wheat through Harlow Agricultural Merchants.

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