(Recasts; adds CEO comments, market background)
By Chris Prentice
NEW YORK, July 29 (Reuters) - Green Plains Inc is courting Mexican fuel buyers in a bid to boost ethanol exports to the country, the company said on Wednesday, as the U.S. industry continues its search for new outlets for growing output and large supplies.
Green Plains has had discussions with industrial users in Mexico to sell U.S. ethanol, the Omaha, Nebraska, ethanol producer’s president and chief executive officer, Todd Becker, told Reuters in an interview after an investor call.
Increasing exports would be much-needed relief for a U.S. industry facing inventories swollen near their highest in three years, prices at 4-1/2-month lows, and a major battle against Big Oil over the futures of government-mandated volumes.
Becker described fresh export business to Mexico as a “work in progress.” He also cited fresh inquiry from buyers in China, a huge market long sought by U.S. exporters.
Mexico is already a buyer of the U.S. biofuel, scooping up 30.5 million gallons in 2014, or 4 percent of U.S. exports. Green Plains has sold ethanol for export to Mexico, though the company declined to disclose volumes.
A shift in Mexico away from methyl tertiary butyl ether (MTBE), one of ethanol’s major competitors as a gasoline additive, could mean hundreds of millions of gallons of additional biofuels demand, Green Plains said.
China has also been making inquiries about industrial grades of U.S. ethanol, Becker said.
Green Plains is maintaining its outlook for total U.S. ethanol exports at 800 million to 1 billion gallons this year.
The company has slated 18 percent of its July output and 21 percent of its August production for exports, higher than the same period last year, Becker said.
Margins are likely to continue to strengthen on the strong output and as the industry heads into maintenance season, he said.
Green Plains on Tuesday reported second-quarter net income of $7.8 million, down sharply from $32.3 million a year earlier. Shares of the company’s stock were up 0.2 percent at $23.69 by 3:20 p.m. EST. (Editing by Jonathan Oatis)