Pacific Ethanol says importing sorghum to make biofuel

March 28 Thu Mar 28, 2013 2:59pm EDT

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March 28 (Reuters) - Pacific Ethanol Inc said that it is importing sorghum as well as buying the grain from domestic sources as prices for corn, the primary feedstock for the U.S. ethanol industry, hovered near historic highs.

"Both as a step toward qualifying for advanced biofuel and to take advantage of favorable pricing, we purchased sorghum as feedstock for producing ethanol from local, Midwest and international markets," CEO Neil Koehler said in the company's fourth quarter earnings release late on Wednesday.

Grain traders said rumors had circulated earlier this month that the company was buying sorghum from Argentina for import into Stockton, California.

California-based Pacific Ethanol operates four plants in the western United States with the capacity to collectively produce 200 million gallons annually.

Sorghum seed producer Chromatin Inc last month signed a multi-year agreement with Pacific Ethanol to produce and deliver locally grown sorghum to make ethanol.

Several U.S. ethanol plants have explored alternative feedstocks such as wheat this year as the U.S. corn stockpile was projected to shrink to the smallest in 17 years by late summer. The plants still require corn, but are able to stretch supplies by displacing up to 20 percent of corn with another grain.

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