German bioethanol firm cuts output on imports

HAMBURG, Sept 1 (Reuters) - German bioenergy company Verbio (VBKG.DE) said on Monday it would cut German bioethanol production in September, largely because of competition from cheap imports.

The company's 100,000-tonne-per-year plant at Zoerbig in east Germany will run down production this month and put its workforce on short-time working, the company said in a statement.

"Grain prices are now at levels below last year but still do not permit competitive market production of ethanol as imports remain cheaper than European ethanol," Zoerbig plant director Klaus-Dieter Bettien said.

Verbio had only put its second bioethanol plant at Schwedt in east Germany back into production in July following a production suspension since autumn 2007.

Schwedt was idled because of high prices for the 600,000 tonnes of grain it consumed each year to produce 200,000 tonnes of bioethanol annually and was returned to operation with sugar as the main feedstock.

In July, Verbio said German demand for bioethanol remained weak and that cheap imports, especially from Brazil continued to cover much German demand.

Germany raised compulsory blending of bioethanol with fossil gasoline at oil refineries to two percent of energy content in January this year from 1.2 percent previously.

But much of the demand for blending was being met by imports.

(Reporting by Michael Hogan; editing by Christopher Johnson)