NEW YORK/CHICAGO (Reuters) – Biofuels pioneer Archer Daniels Midland took another step toward abandoning its pure-play ethanol assets on Friday, the latest sign of the industry’s struggles with U.S. President Donald Trump’s trade wars, thin margins, and overproduction. U.S. law requires ethanol to be blended into gasoline but domestic demand for the biofuel added to gasoline has flatlined in recent years as consumers have opted for greater fuel-efficiency and electric vehicles. Ethanol producers have been forced to look abroad for demand growth. They had banked on China to buy excess capacity, but punitive tariffs in the last two years have halted buying, exacerbating the industry’s substantial overcapacity. ADM executives acknowledged that problem on Friday when the company reported that profit tumbled 41 percent in the first quarter. ADM said it may spin off three large dry mills, which primarily produce only ethanol, after unsuccessfully searching for a buyer for those mills since 2016. At the time, its move to exit ethanol shocked the industry due to ADM’s status as a leading biofuels producer. ADM Chief Financial Officer Ray Young said on an earnings call that the industry must stop the self-inflicted wounds. “Our decision to monetize the dry mills is… continue reading
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