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Germany is forecast to produce 3.6 million tonnes of refined sugar from its 2008/09 crop, well over the country's EU sugar production quota of 2.7 million tonnes, which has been cut as part of European Union reforms to curb farming subsidies.
With 178,000 tonnes of unsold sugar from last season added to this season's production quota, German sugar industry body WVZ estimates the country will produce 956,000 tonnes of sugar outside its EU quota, which cannot be sold as food.
WVZ Chief Executive Dieter Langendorf believes bioethanol will be a big customer for the excess sugar.
"We are taking a relatively relaxed view of this situation," Langendorf said. "I personally believe that we will be able to market these volumes."

But wheat prices have since fallen from a peak of about 250 euros a tonne in March to around 135 euros a tonne now, hit by the global financial crisis as well as a plentiful grain after farmers planted more to take advantage of high prices.
Verbio Chief Executive Claus Sauter said the company's strategy to use more sugar would continue, but the could switch back to grains if prices remained attractive.
"We can change feedstock use in a matter of hours," he said. "We will watch the prices each day and make a decision on which commodity to use."
A German grain trader said he was confident lots of sugar would be pushed out of the bioethanol market. "A huge volume of cheap feed grains are now available," the trader, who did not want to be named, said.

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